Following the Money: Souheil Badran

0

Souheil Badran: President, Alipay North America

Alipay is a third-party online payment platform launched in China in 2004 by Alibaba Group and founder Jack Ma. The company recently announced plans to expand in-store mobile payments outside China — specifically North America — in response to the number of Chinese citizens traveling outside that country’s borders. In North America, Souheil Badran leads the effort.

With years of global experience across e-commerce, big data, security and payments industries and cultures from Silicon Valley to China, Badran has been instrumental in developing and executing the strategies that have led several companies to the top of their respective industries.

Prior to his executive leadership role with Alipay, Badran served as president and CEO of edo Interactive, where he led the effort to seamlessly deliver personalized offers to consumers through credit and debit cards as well as mobile devices.

Badran joined Alipay in October 2016 to pave the way for Chinese visitors to the United States. More than 2 million Chinese tourists visited the U.S. last year; that number is expected to reach to 3 million in 2017. Chinese tourists appreciate finding items in North America that are unavailable in China, or merchandise they can purchase at more affordable prices.

Regardless of motivation to purchase, Alipay hopes to provide a familiar and trusted payment method for its Chinese customers.

What do North American retailers need to know about Alipay?

Alipay is a fintech company, enabling users to pay for items online and in-store in China. As of last December, the number of Alipay users reached 450 million in China.

But Alipay is more than just a simple payment processor. As a company we’ve started to understand the lifestyle, payment history and credit history of our customers. For instance, we can now extend credit on the spot to customers who don’t currently have the funds to completely cover the cost of a purchase. Investing is difficult for Chinese citizens who don’t live near physical banks, so we offer banking. We have investment vehicles including money markets for investment purposes as well as for customers to build credit.

And we offer users many other services such as insurance on delivered packages. On Chinese “Singles’ Day,” which is the largest online shopping day of the year, Alipay issued $30 million worth of insurance.

The typical world traveler has a “one and done” experience. They go to a country, pay and they’re done with that payment processor. There is no continuation of the experience, but for these Chinese travelers with the Alipay app, their entire travel experience has been made easier.

How does Alipay work?

Alipay is an app, but it’s different from other payment platforms. And Chinese consumers are very comfortable using it. In fact, on average they log on seven to eight times a day. They use their phones for everything, so turning the phone into a payment method is not a problem.

The typical world traveler has a “one and done” experience. They go to a country, pay and they’re done with that payment processor. There is no continuation of the experience, but for these Chinese travelers with the Alipay app, their entire travel experience has been made easier.

What services are included?

Here’s what they can do: quickly transfer money, call a cab, book a hotel, buy movie tickets or discover nearby shops and restaurants, without even having to download any additional apps like Uber or Airbnb. It’s all on their phones in a single app that’s in their language.

The Alipay app is lifestyle-based — people use it to share pictures and access social media. Even when in the U.S., users can pay bills, check stocks, pay vendors, buy insurance and invest, all through the app.

Alipay is also working with the United Nations to reduce the carbon footprint of users. Similar to Fitbit, our users can grow a digital tree based on the number of steps they take and can steal points from a friend’s game as well. This concept of gamification becomes real when the user reaches a certain number of points and an actual tree is planted in northern China.

Why is Alipay taking a look at North America now?

Alipay actually looked at that question several years ago and first followed the Chinese consumer to Southeast Asia (Hong Kong, Taiwan, Indonesia, Thailand and the Philippines). After studying the behaviors of these tourists, Alipay felt comfortable following the Chinese traveler to North America based on the growing number of Chinese visiting the U.S. and Canada.

For the next nine to 18 months, you’ll find us focusing our efforts here, attempting to identify retailers, hoteliers, restaurants and experiences that will appeal to Chinese tourists.

What more can you share about Alipay’s expansion into North America?

Alipay has been in the U.S. for the past three years, focused on working with Chinese consumers purchasing American goods online. Now the emphasis is getting Chinese tourists to spend in U.S. stores. Because U.S. retailers are facing hard times, they welcome the help and are looking for volume.

We’re also attempting to figure out where the Chinese traveler is going, as in which restaurants and experiences attract them. Alipay is partnering with companies such as Verifone and First Data to get introductions to merchants that typically attract Chinese tourists. We know appealing to the Chinese consumer is more about experience.

How did you determine that?

We conducted a study of Chinese tourists in Las Vegas and learned, among other things, that 18 percent of them felt it was important to have a payment method that they felt comfortable using while traveling in the U.S. They were uncomfortable with surprise charges, conversion rates and foreign transaction fees upon return to China. Instead of traveling with currency and having to deal with exchange rates, Chinese tourists can pay with their mobile device.

For retailers, it makes the transaction simple because they don’t need to find a way to communicate with the tourist who may not speak their language.

Is there a typical Alipay user?

Alipay doesn’t profile individual users. Rather, we look to profile usage and behavior. For example, high-end shoppers versus lower end shoppers, white linen restaurant customers versus quick-service restaurant customers. We can then try to serve those categories of travelers with appropriate offers pre-trip.

But it’s noteworthy that both the local retailer and the Chinese tourist share a language barrier. We’re attempting to bridge the gap by giving Chinese tourists everything they need to enjoy their travel and shopping experience in North America through a simple, familiar app. For retailers, Alipay simplifies the payment experience while also attracting more customers to their establishments.

How does a retailer prepare to accept Alipay?

Retailers can use a decal, or if the store is more upscale, there is a plaque to announce that Alipay is accepted from Chinese tourists. However, Alipay has an initiative to target tourists before they leave, while they’re on vacation and then to follow up with them upon their return.

Before tourists leave, Alipay will send offers and information about their destination and suggested places to visit — and spend! During the trip, Alipay will encourage use of the “Discovery Platform” to drive traffic to stores and encourage spending. And post-trip, an effort is made to keep the consumer and the store connected to encourage loyalty for future trips.

What is the “Discovery Platform”?

It’s similar to Yelp. Chinese consumers can search for places and experiences and the app will direct them to nearby locations. These tourists are poised to spend, so driving traffic of tourists looking to shop is a huge benefit to U.S. retailers. Alipay is transforming payment processing, which has historically been a cost center, to a revenue generator.

Janet Groeber has covered all aspects of the retail industry for more than 20 years. Her reporting has appeared in AdWeek and DDI Magazine, among others.

Share.

Comments are closed.