Alipay takes aim at tax refund market

Alipay, the online payment service arm of Alibaba, recently teamed with Swiss tax refund firm Global Blue to coordinate on tax-free tourism shopping services. The partnership will allow tourists to reclaim taxes on purchases made abroad through Alipay.

Chinese tourists have long struggled with the complicated and confusing tax-refund process. Surveys show that over 1 billion yuan ($161 million) in retail tax refunds went unclaimed in Europe alone last year.

Refund services from State-owned banks have not been able to meet the demands of Chinese people, who are increasingly going abroad to travel, shop, study and invest. Many of these people are younger individuals who enjoy the ease of Alipay and already use it to manage their money.

Perhaps the biggest winner in all of this though is Alipay. As a leader in the payment service arena, it is no wonder that Alipay is building global ties. Offering cross-border services will not only broaden its own profit potential, it will spur credit card providers and traditional banks to respond with more competitive services of their own.