Key Developments in B2B Payments and Supplier Discovery
Alibaba, a prominent e-commerce and retail company, is poised to significantly alter how payments are processed within its global Business-to-Business (B2B) marketplace. The company is actively investigating the use of tokenized payments in collaboration with JPMorgan and is also contemplating the integration of stablecoin-like technologies for future transactions.
In a recent interview, Kuo Zhang, President of Alibaba, revealed that the platform is exploring these digital payment instruments as a growing number of technology and financial firms are adopting tokenization to modernize cross-border transaction processes. The primary objective behind these explorations is to mitigate the delays and substantial fees commonly associated with international payments, which often involve multiple banks and currency conversions.
The goal is to reduce delays and high fees that often arise because international payments pass through several banks and involve multiple currencies.
Tokenized Currency Initiatives with JPMorgan
A particularly noteworthy development concerns the transformation of international payments. Cross-border B2B transactions traditionally require several days to settle due to their passage through numerous financial intermediaries. To expedite this settlement period, Alibaba is examining tokenized versions of established currencies, such as the U.S. dollar and the euro. These digital representations of bank-held money can be transferred via blockchain systems, potentially streamlining the process by reducing the number of intermediate steps.
To implement this system, Alibaba intends to partner with JPMorgan. JPMorgan has been at the forefront of developing its own tokenization technology and recently introduced JPMD, a payment token designed for business transactions. Following initial experience with tokenized money transfers, Zhang indicated that Alibaba will also assess the potential utility of stablecoins in specific scenarios.
Enhancing Supplier Search with AI Mode
In parallel with the payment system updates, Alibaba has launched a new AI-powered subscription feature named AI Mode. This tool is engineered to enable buyers to search for suppliers using a more granular set of criteria, including pricing, production capacity, shipping arrangements, and reliability. Instead of manually reviewing numerous supplier pages, users can leverage the AI system to consolidate and compare information in a single location. Zhang highlighted to CNBC that a significant number of businesses are increasingly adopting AI-driven search methods, particularly within the complexities of global supply chains.
Alibaba is considering a subscription model for AI Mode, with potential pricing around $20 per month or $99 per year, although the final pricing structure is yet to be determined. This initiative aims to introduce a new revenue stream for a division that currently generates most of its income from marketing services and cross-border trade functionalities.
Upcoming Updates and Innovations
Another significant update anticipated in December is the introduction of agentic pay, an AI tool designed to automatically draft contracts between buyers and suppliers by analyzing their past message exchanges. Currently, many of these agreements are manually created offline and subsequently uploaded, introducing additional procedural steps. The new feature will automate the generation of a draft contract, which both parties can then review and approve. The overarching objective is to accelerate a process that is frequently hindered by fragmented communication.
Alibaba is exploring JPMorgan’s tokenized deposit system (JPMD) to speed up international B2B payments.
The company is also launching a new tool called AI Mode, which helps buyers easily compare suppliers.
Alibaba shared that it is also evaluating using stablecoins in the future.