As stated in the blog Alipay, should banks worry? , Alipay.com, China’s largest third party online payment platform in terms of transaction volume, stirred some controversy in June with the launch of a high-profile wealth management product called Yu’E Bao. The cooperation of alipay, Tian Hong Fund has exceeded 100 billion, more than 29 million accounts, which has become the largest and the first fund exceeded 100 billion. Although the Fund just started up for 5 months, it has already ranked no.51 global fund in the world.

With the same ten thousand dollars,  you can only get thirty dollars interest rates each month; however transferring your money in alipay to Yu’E Bao, you are likely to benefits 300-400 dollars each month! Would you still prefer putting your money in the bank? Alipay is just like a banner edge ball, scraping the bank’s monopolization right now.  China’s one day shopping spree, as many people aware of right now, has also benefits Alipay by a huge step. Only after the first ten minutes that day, alipay had already handled 168 million transactions and 500 million dollars.

Is internet banking consider an opportunity or challenge to the bank industry? Comparing to banks and other traditional financial companies, internet banking does have a lot of unique advantages; on one hand, there are hundreds of millions of internet users, making the internet giant populace in financial penetration high, making it easy to realizable advantages into user capacity; on the other hand, the internet banking is more flexible in time, place, amount, it takes better care of those “grassroots demand” which the bank finance are not able to cover. It is not only the competition between banks  and banks in today’s society, people now suddenly go for online banking, this could put a lot of pressure on  those small banks who used to attract deposits with financial products.

Different from the point of view from the author of Alipay, should banks worry?  I think this is actually a great opportunity for both the banks and internet banking. The financial market is large enough that no one can pocketed. Under the pressure of internet banking, the bank industry will become more internet-based and those internet companies will accelerate its financialization at the same time. Bank industry and internet companies will collaborate instead of opposition.

Sources:

Mu, Chong. “Alipay, Should Banks Worry?” – People’s Daily Online. Global Times, n.d. Web. 17 Nov. 2013.

Wang, Shanshan, and Eric PFANNER. “China’s One-Day Shopping Spree Sets Record in Online Sales.” Nytimes.com. N.p., n.d. Web.