PayPal Stops B2B Payment Partnership with Alibaba

by Mercator Advisory Group 0

PayPal said Friday it would stop providing e-payment services for AliExpress, an online sales platform operated by Alibaba, the largest e-commerce portal in China. Without specifying reasons, PayPal only said the decision was “following a routine annual business review.”

AliExpress connects suppliers in China with small online merchants and marketplace sellers, allowing them to place smaller-quantity orders and offering an escrow service for protection.

By allowing overseas buyers to use PayPal, Alibaba enabled its business customers to source goods through AliExpress in their preferred local currency. Other payment methods include Moneybookers, Visa, MasterCard and bank transfer, as well as select debit cards, according to the AliExpress website.

Reuters reported it had obtained a document that showed PayPal was unhappy with AliExpress’ rising consumer business on the platform, which is meant for business transactions, and wanted to raise transaction fees for certain accounts. AliExpress commonly allows merchants to place low quantity items as samples, and recently launched the AliExpress Premier Channel showcasing over 30 premium Chinese brands.

Alibaba has been in dispute recently with its shareholder Yahoo when Alibaba transferred the ownership of its consumer payment operation Alipay, the largest online payment service provider in China, to a separate entity.

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