Alibaba Begins Building Alipay Bank

Alibaba’s Alipay is rolling out a new service: Alipay Bank, which will have all of the functions of a brick and mortar bank for Chinese users.

Recently, the China Banking Regulatory Commission announced it had approved Alibaba’s application to start a bank, which would go beyond Alipay’s first step in allowing faster payments for e-commerce purchases and person-to-person transfers. The new Alipay Bank will take deposits directly from consumers while allowing Alipay to offer more complex financial services.

While an Alipay mortgage isn’t coming anytime soon, some in China are expecting Alipay to begin offering things like a debit card, lines of credit, and other more conventional banking services that Chinese consumers can use on top of the app-based payment system that is already in place.

Additionally, an Alipay bank will make it easier for Chinese merchants to accept transfers from outside of the country.

Alipay’s savings accounts will reportedly offer consumers a higher interest rate on their deposits, which will encourage more of China’s underbanked population to open accounts. The largest bank in China, the Industrial & Commercial Bank of China, has publicly criticized the Alipay Bank as unreliable and needing more government regulation.