Alipay's micro-loan service has registered an average daily increase of 140,000 customers since June 13 and its daily accumulated fund has touched 400 million yuan ($65 million). Alipay has not only boosted its e-commerce platform, but also attracted ordinary people because of its advantages such as low costs, safe investment means and relatively high profits, says an article in Beijing News. Excerpts:

The average loan a person can get from Alipay is 2,000 yuan. In the past, no one would have bothered to even pay attention to such a loan service because the accrued interest would have been more than the profit made from the loan.

But Alipay has changed that perception because its loans are a lot easier to obtain. Its earnings have not only surpassed that from demand deposits, but also its seven-day annual rate of return is higher than that offered on five-year fixed-term deposits. Alipay now poses a challenge to Chinese banks and other financial institutions.

When customers realize that banks cannot meet their needs, they obviously will opt for a readily available convenient, safer and more profitable service. Since Aliloan - which is part of Alipay - has started providing credit for small, medium- and micro-sized enterprises on Taobao and Tmall, and it seems that the organization can catch up with major banks in operation capacity.