Alipay becomes pay option for Airbnb for rentals

Updated: 2014-09-30 11:53

By Lian Zi in San Francisco(China Daily USA)

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Alipay, China's largest online payment service provider and Alibaba's affiliated payments service, is expanding its business in the US by becoming a payment option for the home and apartment rental service Airbnb.

Previously, Chinese travelers looking to use Airbnb had to pay using international credit cards, which many Chinese consumers do not have. The removal of this requirement makes it easier for them to pay on the platform. Users can also log into Airbnb through microblogging website, Weibo. Alibaba Group owns around 30 percent of Weibo.

The tie-up will allow Chinese travelers to pay for their lodging in renminbi using their Alipay accounts while the owners overseas get paid in their home currencies through bank transfers.

Airbnb is collaborating with Alipay because it felt it was missing out on business from Chinese travelers who didn't have a dual-currency credit card or PayPal account necessary to purchase a stay through Airbnb, according Lex Bayer, Arbnb's global payments head.

"Business from travelers who live in China has grown more than 250 percent year over year at Airbnb," he said. And the Chinese users are very satisfied with the services provided by Airbnb.

"It is a smart move for both Alipay and Airbnb," said Hans Tung, managing partner of GGV Capital in Menlo Park, California, whose focus includes mobile Internet and cross-border ecommerce.

Airbnb's rental inventory in Asia, Europe and the US should attract young Chinese Internet savvy users, said Tung.

He told China Daily that the ability for Chinese users to use Alipay to book overseas trips is the key for success of the deal.

The number of total guests using San Francisco-based Airbnb has reached 17 million in more than 190 countries and 34,000 cities, according to the rental service. Customers can "book an apartment for a night, a castle for a week, or a villa for a month at any price point."

Roger Jin, a Chinese student who is studying in the US, told China Daily that he booked a house with Airbnb for his parents and grandparents who came from China to attend his graduation ceremony this summer.

Jin said Airbnb is a good option for a tour group of more than three people.

"The short-term rental is a good option for me since the houses posted online always have at least two rooms, which is cheaper than booking two separate hotel rooms," he said.

He said he is also satisfied with the privacy protection efforts made by Airbnb. "Both hosts and tenants' identities were verified by Airbnb. Before booking, hosts and guests could only contact each other on Airbnb which prevents users' info from being leaked."

It is more reliable for tenants to rent short-term houses on a third-party platform, which could effectively protect users' payment security, Jin said.

"I am excited about Alipay's collaboration with Airbnb, which makes the payment process easier for users in China just like my parents," he said.

Earlier this year, Alipay partnered with Stripe, a US-based payment company, to let any business that runs its payment system on Stripe accept purchases made with Alipay.

Launched in 2004, Alipay is a third-party online payment platform with no transaction fees. According to a research report, Alipay has the biggest market share in China with 300million users.

(China Daily USA 09/30/2014 page2)