De-blackboxing Alipay Wallet from design and social perspectives

Abstract

Alipay is a third party online payment platform launched by Alibaba Group in 2004. It becomes one of the most important online services and poses great influence on the development of e-commerce in China. Its mobile app, Alipay Wallet, have reached more than 500 million registered users. Nowadays Alipay Wallet is far more than simply being an interface of convenient online payment, its wild popularity is tightly associated with a systematic design structure of personal wealth management and integrative social interaction functions which greatly change people’s lifestyle. This paper will firstly discuss about the design of main user interface. Then the paper will divide the big picture of Alipay Wallet into three specific parts: online transactions, personal wealth management, and its dynamic features of social interactions, analyzing each sector from both design and social perspectives.

Introduction of Alipay Wallet

Alipay stepped into the mobile payment industry and developed its mobile version for both iOS and Andriod operating system in 2009. The mobile app was renamed as “Alipay Wallet” in 2013, which highlighted its convenience as a virtual wallet and its huge impact on creating a cashless society. Since Ant Financial Services Group, a FinTech spin-off from Alibaba Group took over the business, more expanded features and affordances have been provided that enable users to do nearly every money-related activity on this single mobile app (video 1).

(video 1 – An introduction of Alipay Wallet.)

We will specifically focus on the latest 10.1.8 version of Alipay Wallet available on the App Store for iOS devices. Users can simply create an Alipay account by phone numbers and email addresses. After creating an account password, users are required to set up a payment password to enhance account security for future transactions. Beyond the basic account registration, Alipay Wallet has a strict real-name system. Only by filling out real personal information can users experience all the app functions. We will later dig deeper into the real-name system regarding governmental restrictions for online transaction platforms.

Having a look at the general layout of Alipay Wallet, users are able to randomly switch between different types of the main user interface by clicking four icons at the bottom. The interface is designed in a highly customizing fashion. Take the default  “Home” page as an example. Functions are well organized into different rows. To deal with conflicts between the increasing number of add-on features and the demand of simplicity, users are able select eleven most frequently used services and arrange the icons in the main interface (image 1). Under such circumstance, users participate in designing their personal-customized interface, which provides great convenience for them to navigate certain features.

(image 1- Customizing the order of icons in the area highlighted by a red frame.)

Customization of the main user interface is correlated to user’s GPS location. The second page of the interface shows huge differences when Alipay Wallet is used in different countries despite of the same version of the app (image 2). The second page is named as “coupon” for people who locate in Washington, D.C., in which users have access to services including travels, oversea shopping and exchange rate reports. For users in Mainland China, the second page is “Koubei”, a life service platform operated by both Alibaba and Ant Financial Services Group. The services include local transportation, entertainment consumption and product promotions.

(image 2 – Layout differences based on GPS locations: Washington D.C on the left vs. Shanghai on the right.)

The main user interface of Alipay Wallet is designed based on the knowledge of customers’ needs and expectations. An important task of digital designers is to “have an open-ended assessment of human needs and widen the range of design choices” (Murrey, 2012). To meet consumers’ demands under ever-changing global contexts, Alipay Wallet extends its services to people all around the world with the permission of registration by foreign phone numbers, providing them with online payment methods of goods and services from abroad. However, the app has constraints in terms of language barriers. Simplified Chinese is the dominant language for Alipay Wallet. Although multiple language versions are available for foreign users, the user interface does not display entire content in English even if the user shifts the language setting. Language constraints increase users’ confusion, which negatively influence their future using experience.

Forwarding its evolution as a “global lifestyle super app”, Alipay Wallet cumulates increasing numbers of functions into one single app. Under the inspiration of combinatorial design principles, Alipay Wallet combines existing technologies of online payment methods with new integrative designs. This paper attempts to categorize the complex but inventive system of Alipay Wallet into three major modules: online transactions, wealth management, and massive features of social interactions. These divided subsystems are designed separately in different ways with various social and cultural dependencies.

1. Online Transactions

As an online transaction platform, Alipay Wallet provides three major payment methods. Quick pay is an idea of adding debit or credit card information directly on the app. Online banking payment means that users are redirected to the online banking systems provided by according banking institutions during the payment process. Convenient payment method is to pay by account balance. For Alipay Wallet, there are two distinct types of online transactions: secured transaction and instant transaction.

1.1 Secured Transaction

Secured Transaction was traditionally designed for boosting e-commerce on Taobao.com, an Alibaba Group owned online shopping website. Alipay and Paypal share a similar role as an intermediary between sellers and buyers. However, the operational processes of these two services have huge differences. If a buyer makes a purchase through Paypal account, Paypal will immediately send the amount of money to the seller’s Paypal account as soon as the buyer place the order. Using Alipay as a payment platform, the buyer has to firstly remit money to Alipay, confirming success of the order placement. The seller will then be notified about the buyers’ payment, and will be informed to ship the goods to the buyer. Alipay holds funds during the shipment process. The money will not be forwarded to the seller’s Alipay account until the buyer confirms delivery and satisfaction of the commodities at a limited period of time, roughly a week after the order shipment. Paypal acts as an agent of money collection while Alipay can be treated as an escrow holder. The differences of law system between U.S. and China greatly affect the distinctions between these two third parties. There are strict rules and statutory laws about escrow in the U.S. such as California Escrow Law, which poses high standard for licensing companies to perform online escrow services (Yu & Shen, 2015). It is reasonable for Paypal to be distinguished from escrow, in order to avoid any cost under the supervision of strict regulations. However, China’s law system lacks rigorous rules regarding escrow, which provides Alipay with free space to set up systematic online escrow services. Therefore, governmental regulations and law systems significantly influence the design of secured transaction system in different countries.

1.2 Instant Transaction

Secured transaction is primarily designed and developed from online shopping, while instant transaction can be regarded as a newly emerging model of payment type that facilitates peer-to-peer payment interactions and daily offline purchasing experiences.

Peer-to-peer transaction, or P2P transaction, refers to an interpersonal online money transfer process. To provide a better user experience, Alipay Wallet combines online transactions with instant messaging services. It embraces already existed functions of instant messaging apps. Once users become friends on Alipay Wallet, they can freely send texts, photos, emojis, videos, and even real-time locations with each other. However, Alipay Wallet goes far beyond simple emulation of prior technologies and functions by embedding a cumulative combinatorial design approach. Alipay Wallet allows users to directly transfer money to their friends in the chat box. The combination of instant transactions and instant messaging services shapes a new way of online interactions.

Instant transaction on Alipay Wallet also promotes innovation of offline purchasing environment. Without cash or credit cards, users are able to make any purchase in stores as long as Alipay payment is acceptable. Two types of Alipay payment methods are available in offline purchase: by QR code and by conventional Bar code respectively. In regular grocery stores, purchase can be processed successfully by either way. Customers have the initiative to scan the store’s QR code to make the purchase (image 3), while store cashiers are able to complete the purchase by scanning a conventional barcode displayed on the customers’ Alipay Wallet app (image 4).

(image 3 – How to process a payment by QR code.)

(image 4 – How to process a payment by conventional barcode.)

One of the prominent affordances is the QR code, a two-dimensional information matrix. It contains more information, and is more readable than a conventional barcode. Nowadays it is widely used for offline transactions, however, QR code does not substitute conventional barcode despite of its overwhelming superiority.

Barcode is widely familiar to the public, which has been used for commodity purchase for over 40 years. From the perspective of distributed cognition, display of conventional barcode on Alipay Wallet is treated as cognitive schema that users are able to clearly figure out the function of the barcode displayed on the app (Murray 2012). They understand that the barcode should be scanned by the cashier in order to buy a product from the store. This could be one of the reasons why the barcode, as an affordance, is still preserved by Alipay Wallet designers.

1.3 Security Mechanisms of Online Transactions

Regardless of the types of transactions, Alipay Wallet is processed with high level of security. Superficially, users can easily notice that it provides necessary mechanisms to secure users’ accounts and funds, such as two layers of password settings. A login password is used for entering the interface, while another payment password is required for processing any type of online transactions on the app. Users will be reminded to make two different passwords in order to enhance their account security.

From social perspectives, government regulations offer effective measures to improve the overall security of the system. People’s Bank of China, also the central bank of China, is a government sector that announces monetary policies and regulates financial institutions. With the rising prevalence of non-bank financial services, PBC takes great efforts to implement regulations about third party online transactions, in order to maintain a secure financial environment.

Firstly, according to the “Administrative Measures for the Online Payment Business of Non-Banking Payment Institutions” announced in 2015, PBC set up strict limitations in terms of time and amount of online transactions. For Alipay Wallet, the maximum amount of one-time payment is 200 thousand RMB, which equals to approximately 30 thousand U.S. dollars. Up to 100 times of online transactions are available for mobile users per day, and 200 thousand RMB is the maximum amount of online transactions per year. Establishing such kinds of limitations helps prevent users from being victims of Internet frauds.

Secondly, based on upgraded policies, real name authentication has become an indispensible procedure of using third party online transaction services in 2016. Alipay users are encouraged to perfect their personal information, including identification card numbers, aka U.S. social security numbers, for Chinese citizens and passport numbers for users from other countries. It helps raise credibility of interpersonal online transactions.

Thirdly, government dedicates to fighting with money laundering and potential of money stealing by consolidating its control over transaction data. Relevant policies greatly affect online transaction processing and relationships between third party payment services and commercial banks. Previously, any transaction from one bank account to another could be freely processed on third party online transaction services, in which had dominant control of transaction data and records. It was difficult for the government to obtain accurate transaction information and money flows. In response, PBC started to conduct interference to third party intermediaries in order to consolidate its power of supervision toward financial environment. A new rule was issued recently, requiring third party transaction platforms such as Alipay to pass through an independent online clearing house system controlled by PBC, which would be implemented in June, 2018 (Cheung, 2017). Adding one more layer between third parties and financial institutions (image 5), PBC is able to aggregate and secure sufficient data resources from disperse platforms and institutions, thus diminishing the potential of online transaction deception. Overall, designs of security-related features on Alipay Wallet could no be discussed apart from the governmental dependency.

(image 5 – Chinese government ensures security of online transactions by adding the layer of online clearing house system highlighted in the red circle.)

2. Personal Wealth Management

2.1 As Online Bookkeeping

Alipay Wallet is a platform that provides convenience for people to manage their personal wealth. Active e-commerce participants create huge numbers of transactions on Alipay Wallet everyday. It is necessary to design a more readable and portable online account book for them to track their corresponding transaction history. The “Money Tracker” is such a kind of cognitive artifact, a function “designed to maintain, display, or operate upon information in order to serve a representational function” (Norman, 1991). There are three ways of viewing transaction records: by chronological order, by category of transaction purposes, and by accounts used for certain payment (image 6). In physical world, the ways of billing arrangements vary from person to person. Providing three kinds of layouts makes it possible to meet more people’s needs and expectations. It enhances users’ memory of their past online transactions created on Alipay Wallet, and it enables users to know about their transaction activities and spending habits in different ways.

(image 6 from left to right – Three ways of viewing transaction history: by date of transactions, by category, and by account.)

2.2 As Online Commercial Bank

When people are immersed in online transactions, Alipay Wallet provides opportunities for them to make investment. Yu’ebao is an Internet fund product operated by Tianhong Asset Management Co., Ltd., which manages users’ account balance and produces profits to users. The funds in Yu’ebao can be topped up and withdrew at any time for any online transaction purpose on Alipay Wallet. Yu’ebao significantly attracts more people’s attention and interests with considerable returns. It offers around 6% in annualized return in contrast of only 0.36% return offered by banks’ deposits (Tu, 2014). Attracting 325 million active users in 2017, Yu’ebao have become the largest money market fund in China. People are more likely to save their money in Yu’ebao instead of making bank deposits considering high returns and convenience.

In addition to the substitution of bank deposits with Yu’ebao, the extension of credit service named Huabei becomes a replacement of bank loans. Consumers can do both online and offline shopping with borrowed money on Huabei, just like how they use traditional credit cards to checkout in the real life. Available credit line ranges from five hundred to 50 thousand RMB based on Alipay virtual credit scores raised by the account users. Those who made consumptions with Huabei are required to make the payment on the tenth day of each month. More and more people are reluctant to do shopping with credit cards. The number of Huabei users reached 100 million, and “60 percent of the users haven’t linked their credit card to Alipay accounts” (Ding, 2017).

Both Yu’ebao and Huabei share many things in common. From the perspective of design thinking, creation of perceived affordance is the starting point of name design. According to Norman, “designers care more about what actions the user perceives to be possible than what is true” (1999). Perceived affordances suggest and drives people to take possible actions. Designers embrace meanings into names that people can easily know about what each function is about. The name “Yu’ebao” and “Huabei” come from Chinese Phonetic Alphabet. To directly translate “Yu’ebao” from Chinese into English, it means a treasure of balance, thus having the extended meaning of a good function for managing account balance. Users can easily perceive the features of Yu’ebao, and then take the action to use it for the purpose of making corresponding investment. “Huabei” is the meaning of “just spend” in Chinese, which can be connected to the idea of spending money without concern if one runs out of short-term savings. Users will be implied that Huabei is the interface for loaning money. They may be more likely to take the action to use this credit service for purchasing commodities. Name design also has cultural dependency. Connections between the meaning creation and shared cultural knowledge could not be ignored. It is easily for Chinese users to perceive the meaning of both names “Yu’ebao” and “Huabei”. However, these words hardly make sense to users who are not familiar with Chinese culture and language.

From the perspective of social consequences, Yu’ebao and Huabei have significant impact on the operation of commercial banks and government works. Commercial banks encounter great challenges to retain their potential customers when facing with huge competition of better online investment and credit pay services. With Yu’ebao and Huabei, users are more likely to make payments with their account balance rather than use linked debit or credit cards. When it comes to the positive side of social consequences, design of virtual credit scores facilitates the perfection of social credit system in China. The Alipay credit score which ranges from 350 to 950 is compiled by transaction records, payment history, credibility of personal information, and personal impression obtained through online interactions, etc. Not only can Alipay credit score be used for calculating a reasonable credit line on Huabei, but it also provides convenience in people’s daily lives. For example, users who get higher Alipay credit scores have the privilege to waive secured deposits for shared bikes. Virtual credit scores assess citizen’s financial trustworthiness, which becomes an important factor for improving “social credit score plan” in China. China’s State Council issued a planning outline for the construction of a social credit system in 2014. It aimed at setting up social credit scores for citizens based on onmindirectional analysis of people’s daily behaviors, including “financial transactions, political and social participations, as well as their general lifestyles” (Dörrer, 2017). Although Alipay credit score is not a part of the official social credit system, it provides Chinese government with invaluable resources to establish social credit scores in the contemporary society.

3. Online social interactions

In addition to the dominant online transaction services and fast-growing wealth management products, Alipay Wallet puts more and more emphasis on generating innovative designs regarding online social interactions. These design ideas have close correlations with the deep knowledge of new media, as well as social and cultural dependencies. The most significant features are Virtual Red Packets and Ant Forest.

3.1 Virtual Red Packets

Sending red packets during festivals and important occasions have been a Chinese traditional custom for thousands of years. Enclosed with an amount of money, a red packet is the representation of sender’s best wishes to friends and relatives. Currently, an evolution of virtual red packets brings about a new way of online transactions. Most online transaction services, remarkably Alipay Wallet and WeChat Pay, enable people to send money by red packets once they become friends. Unlike regular money transaction notifications, receivers are not be able to see the actual amount of money in the red packet until they click the red packet icon, just as the action of opening the paper red packet in real world. Based on the respect for Chinese custom, Alipay Wallet designers particularly extend conventional meaning of red packets with the inspiration of metamedium. Alipay launched a marketing campaign during Chinese Spring Festival in 2016. All Alipay Wallet users had the same opportunity to participate in the lucky draw of 200 million RMB in the form of red packet after they had successfully collected all five kinds of lucky cards. The five lucky cards were named as “Aiguo Fu”, “Fuqiang Fu”, “Hexie Fu”, “Youshan Fu”, and “Jingye Fu”, which represented the good fortune of patriotism, prosperity, harmony, friendship, and dedication. The meanings of these five cards are correlated to the core values spread by the Chinese government in recent years. “Fu” specifically means good fortune in Chinese characters. To highlight its function of social interaction, friends could exchange their cards to complete the mission. However, the fundamental way of card collection is by scanning different kinds of the letter “Fu” anywhere with AR technology (image 7). During the scanning process, the letter would be digitized into discrete data which could be interpreted and recognized by the mobile system. If the scanned letter matched with the character of “Fu”, users would randomly get one of the five cards. “Metamedium is a combination of already-existing and not-yet-incented media” (Manovich, 2013). As an early medium, a simple written or printed letter “Fu” helps add new properties to the emergence of new media that were born from digitization such as the random fortune cards and virtual red packets.

(image 7 from left to right – How to scan a written or printed Chinese character “Fu” with AR technology & an example of rewarded red packet after successfully collecting all five kinds of lucky cards.)

3.2 Ant Forest

Ant Forest is an interactive game on Alipay Wallet, which embraces profound significance of environmental protection in China. Ant Forest users plant virtual trees by collecting “green energy”, which is calculated in the unit of kilogram. The energy comes from users’ low-carbon activities detected by Alipay Wallet. For example, Alipay Wallet counts users’ everyday walking steps and offline payment transactions which help save paper receipts. All these eligible activities will be converted into energy that makes a tree grows bigger. Once an activity becomes energy, it has to be manually collected by users. An interactive way of collection is to visit friends’ Ant Forest account and steal their uncollected energy. According to Yin (2017), “technology, which can be used to mobilize the public. If everyone is involved, we can easily popularize a low-carbon lifestyle.” Virtual trees planted by Alipay Wallet users do not only represent a kind of game acquirement, but these trees also exist in the real world. Cooperating with Ant Financial Services Group, public welfare organizations grow real trees in desert areas in China on behalf of virtual tree owners. Based on the social implication of environment protection, Ant Forest is designed in a way of media hybridization, which allows users to see what their trees look like in reality through satellite images, real-time photos and locations (image 8). Media hybridization stands for “a more fundamental reconfiguration of media universe in which media properties are exchanged, and new structure are created.” (Manovich, 2013). Ant Forest is taken as an example of media hybrids that include graphic design, photography, GPS location, and the technology of satellite communication. The recombination of various media forms facilitates people’s experience of online social interactions and their offline daily lifestyle as well.

(image 8 from left to right – The user interface of Ant Forest & viewing actual trees through real-time photos.)

4. Conclusion

“It’s not enough that we build products that function, that are understandable and usable, we also need to build products that bring joy and excitement, pleasure and fun, and yes, beauty to people’s lives.” –Don Norman (2004)

By analyzing the three main parts of Alipay Wallet from both design and social perspectives, it is clearly acknowledged that Alipay Wallet is keeping on the right path of being a “lifestyle super app” in China. With its combinatorial design structure, Alipay Wallet consolidates its dominant services of online transactions, and it also strengthens new functions and features including wealth management and online social interactions. The operation and design ideas could not achieve great success without social dependencies. Products with Chinese characteristics are designed to meet people’s daily needs and expectations under certain governmental and cultural contexts. Considering the scope of globalization, Alipay Wallet should pay closer attention to the contexts and needs of foreign users, making its products and designs more adaptive to the global market.

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