E. Sun Commercial Bank (玉山銀行) yesterday entered a partnership with China’s leading online payment service provider, Alipay (支付寶), in a joint effort to tap e-commerce opportunities across the Taiwan Strait.
The lender, the banking arm of E. Sun Financial Holding Co (玉山金控), will help pay Taiwanese product and service providers after Alipay confirms purchases with Chinese buyers, E. Sun Bank chairman Gary Tseng (曾國烈) told a media briefing in Taipei.
“The joint venture aims to facilitate online transactions between Taiwanese firms and their Chinese customers,” Tseng said. “All products and services allowed by both governments may flow through the e-commerce platform.”
Tseng declined to reveal details about how his bank would settle accounts with Alipay, which commands a 49 percent share of China’s online shopping market, with 650 million registered users as of Dec. 31 last year. Alipay, a third-party payment company that processes about 50 percent of online shopping transactions for China’s largest shopping and auction Web site, Taobao Mall (淘寶網), was founded by Alibaba Group (阿里巴巴集團) in 2003, Alipay general manager Jerry Sung (宋靖仁) said.
The lack of a currency settlement mechanism between the New Taiwan dollar and yuan slows cross-strait online transactions and increases currency conversion costs, Sung said.
The joint venture, currently limited to one-way sales of Taiwanese goods and services to Chinese buyers, may expand to two-way trading if there is a demand for it, Sung said.
He added that Alipay would like to team up with other financial institutions in Taiwan and elsewhere to advance its e-commerce business.
E. Sun Financial president Joseph Huang (黃男州), who indicated earlier that the group’s revenue might pick up sharply this year, said the new venture would accelerate commodity, cash and information flows between Taiwan and China in support of the government’s plan to develop special cross-strait financial businesses.
Taiwanese suppliers in the cosmetic, food, garment, gift, entertainment and other sectors may sell their products and services online and get paid through E. Sun Bank, which will charge slotting allowances and process fees depending on sales volume, he said.
Huang did not give numbers on potential revenue growth linked to the payment service.
“Let’s just say the business potential is huge,” Huang said.
Chinese tourists spent NT$50 billion (US$1.69 billion) during their visits to Taiwan last year, while Chinese spent NT$3.6 trillion on online shopping during the same period, he said.
SinoPac Financial Holdings Co (永豐金控) last week said it also intends to explore the cross-strait online shopping market.
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