In a bid to compete with Paypal's arrival soon in China, Alibaba.com has just launched its AliPay online escrow system for use by businesses and individuals in China.

Alibaba says the payment system provides buyers and sellers with a comprehensive solution that resolves the issue of trust in online transactions while providing an efficient platform for transacting online.

To insure AliPay is safe for users to conduct online transactions, Alibaba.com has partnered with four of China's largest national banks, including China Merchants Bank, China Construction Bank, Agricultural Bank of China, and the

Industrial and Commercial Bank of China.

As part of the AliPay launch, Alibaba.com also announced that it will guarantee all transactions made through the AliPay escrow system and reimburse any buyer or seller using the system who is found to have been a victim of fraud.

In the first several months' testing period, the company says the AliPay service proved a success with the 4.5 million members of auction website Taobao.com, an Alibaba.com subsidiary. Of its more than 4.96 million product listings, 70% of the posted products on Taobao.com include a request that buyers use the AliPay service. Products that have already been sold through AliPay include jewelry, cars and real estate.