Hangzhou-based Alipay has integrated an AI agent into its Tap! payment devices, extending AI-powered services to the millions of offline merchants that use the hardware. The company describes the update as the basis for the world’s first large-scale AI-powered offline business operations network.
Alipay Tap! is a contactless payment and customer engagement system launched two years ago. It has reached 400 million users and is deployed across 30 million devices used by millions of merchants. The devices originally handled point-of-sale payments and basic customer engagement functions. Today, it processes more than 100 million daily transactions.
Under the update, Tap! devices connect to an AI agent called “Xiaoyu.” Merchants can speak to the agent to receive analysis of their business operations and suggestions for improvement. Xiaoyu also supports marketing for top-selling products, membership management, and integration with Taobao Instant Commerce for merchants operating within that network. The agent is available to developers and independent software vendors, who can integrate their own SaaS agents and business tools on top of it.
Alipay has also introduced a separate AI agent offering aimed at small and medium-sized merchants that lack in-house AI development capabilities. This includes tailored integration with Tap! devices, AI-generated marketing materials, order and delivery support built on existing supply chain infrastructure, and continuous business analytics.
The Tap! upgrade extends an AI strategy Alipay has pursued through several releases this year. In May 2026, the company introduced AI payment infrastructure comprising AI Pay, AI Wallet, an AI payment processing solution, and Token Pay. This infrastructure is built on what Alipay describes as China’s first Agentic Commerce Trust Protocol, a system intended to secure AI-driven transactions through partnership-based development and an integrated security layer.
Adoption of the AI payment infrastructure has grown since its release. Transactions processed through Alipay AI Pay passed 300 million by May 2026. Alipay reports that businesses across multiple sectors are now combining its AI payment tools with Tap! hardware to link merchant operations with consumer-facing AI interactions.
One example cited by the company involves Haier. Consumers can tap their smartphone against a Tap! device to activate Haier’s AI agent, which can hold a direct dialogue with the customer, provide product recommendations, and complete an order and payment through Alipay AI Pay in a single interaction.
In June 2026, Alipay expanded its consumer-facing AI agent, known in Chinese as “Ah Bao,” across its main app. The update is intended to help the platform’s one billion users locate services and complete daily tasks through AI assistance. Alipay has said the change positions its app as the first super app to operate as an AI-native platform.
Alipay operates as a digital platform connecting more than one billion consumers with over 80 million merchants in China, offering more than 10,000 services spanning travel, healthcare, tourism, and entertainment alongside its payment functions. The company has said it is continuing to build an AI-driven open platform that integrates agents across these services, a process that includes the current Tap! upgrade as one component.
Alipay has not disclosed a timeline for full deployment of the AI agent across its device network or specified how many of the 30 million existing Tap! devices have been upgraded to date.
