Leveraging its risk control system, Alipay now can remind its users when the transactions seem suspicious. If the user chooses the DP function, the transaction can be delayed by up to 24 hours during which it is frozen until released. During this time, potentially with the help of the police, if the beneficiary account is identified as fraud, the money will be returned to sender’s account.
The DP function was designed to prevent scam, which have become increasingly prevalent in recent years. It is often difficult for the victims and police to trace the money back after transactions are submitted to the system as transactions are typically completed in a few seconds. Near-real time payments have improved customer experience, but increased the risk. The DP function gives more time for the sender to realize he/she has made a mistake. By freezing the transactions, it will be much easier for victims to claw the money back. There are two delaying choices of DP functions on Alipay: 2 hours or 24 hours.
Alipay has also improved its risk control system, which is called AlphaRisk. It helps to identify suspicious receivers’ accounts. If the receivers’ transaction histories are suspicious, AlphaRisk will automatically remind the sender to cancel the transaction or use the DP function. With the help of AlphaRisk, the money loss rate of Alipay is much lower than the industry average.
During the experimental period of the DP function, it has helped many customers to limit their losses to scams. Ms Zhao from the city of Ji’nan in China had some issues with her game account. She contacted an online service provider to resolve the issue. However, after transferring the money through Alipay, she was blocked by the provider, when she realized she had been fooled. Fortunately, she used the DP function, and reported to the police immediately. At the same time, the transaction was frozen in the process. A few days later, Alipay received notice from the police. The receiver has been identified as a scammer. So Alipay transferred the money back to Ms Zhao’s account.
The DP function may be one step back from real time payment, but it works well in certain situations as one step closer to safer payment environment. However, fighting against payment scams is a constant battle. The users cannot completely rely on the service providers. It is also the customers' responsibility to enhance self-awareness and keep their eyes peeled while dealing with money.