Alipay adds AI agents to Tap devices used by offline merchants

Alipay said it has upgraded its Tap contactless payment and customer engagement devices into an AI agent-powered network, extending automated business tools to offline merchants, including small and medium-sized enterprises. The company said Alipay Tap has served 400 million users and millions of merchants since launch, with 30 million devices deployed.

The upgrade connects Alipay’s AI agent, Xiaoyu, to Tap devices already used at merchant locations. Alipay said merchants can speak to Xiaoyu to receive analysis of business operations and suggested actions, bringing AI-assisted management functions into stores and other physical points of sale.

Alipay described the system as the world’s first large-scale AI-powered offline business operations network. That claim is the company’s characterisation of the rollout.

How the Tap upgrade works

Alipay Tap is used for contactless payments and customer engagement. By adding Xiaoyu, the device becomes an access point for AI services rather than only a payment or interaction terminal.

According to Alipay, Xiaoyu can support marketing for top-selling products, manage membership activities and connect merchants operating within its network to Taobao Instant Commerce. The agent is also available to developers and independent software vendors that want to integrate software-as-a-service agents and other business operation functions.

For merchants that do not have in-house AI development capacity, Alipay said it has introduced a dedicated AI agent package. The offering includes Tap integration, AI-generated marketing materials, fast ordering and delivery supported by an existing supply chain, and round-the-clock business analytics.

The mechanism is designed to reduce the technical work required for smaller businesses to use AI tools. Instead of building models or custom software, merchants access pre-built functions through the Tap device and Alipay’s platform connections.

Part of a broader AI payments push

The Tap expansion follows other AI initiatives announced by Alipay this year. In May 2026, the company launched what it called a next-generation AI payment infrastructure, comprising AI Pay, AI Wallet, an AI payment processing solution and Token Pay.

Alipay said the infrastructure is based on China’s first Agentic Commerce Trust Protocol, which uses partnerships for development and an intelligent security system intended to protect AI-driven transactions. The company said the package is meant to provide trust and transaction rails for the agentic economy.

Alipay also said transactions processed through Alipay AI Pay had exceeded 300 million as of May 2026, indicating growing use of AI-linked payment flows in China. The company said businesses and brands across sectors are connecting Alipay AI payment capabilities with Tap to improve merchant operations and customer experience.

One example cited by Alipay is Haier. Consumers can tap a smartphone to activate Haier’s AI agent, discuss product needs, receive personalised recommendations, place an order and complete payment using Alipay AI Pay, according to the company.

In June 2026, Alipay launched an AI agent upgrade known in Chinese as Ah Bao. Alipay said the upgrade enables its one billion users to find services more easily and complete daily tasks with AI assistance, and described the move as making Alipay the first super app to become an AI-native platform.

This story draws on original reporting from Finextra Research.