Alibaba Group Holding Ltd's Alipay, China's leading third-party payment solution provider, announced on Monday that it will invest 500 million yuan ($79 million) to upgrade the cash-on-delivery (COD) payment infrastructure of China's e-commerce industry in the next three years.

According to the company, the 500 million yuan investment will also help facilitate innovation in logistics and marketing promotion.

Alipay plans to install 10,000 COD devices in the first half of 2012, covering logistics service in all first-tier cities. A total of 100 million yuan will be invested to implement Alipay's COD devices in all first and second-tier cities by the end of 2012.

Statistics show that more than 70 percent of the transaction volume on China's business-to-consumer (B2C) sites is paid at the time of delivery. Due to considerable hardware investment required in COD payment, less than 20 percent of China’s top 100 B2C operators are able to accommodate credit or debit card COD payment.

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