Fintech giant is rapidly becoming a global force.
Ant Financial is the wholly owned subsidiary of Alibaba Group Holding Ltd; the fintech arm of the Chinese ecommerce giant that raised a staggering $4.5 billion in Series B funding back in April 2016, in a round led by the China Construction Bank, China Investment Corporation and China Development Industrial Bank.
Since the beginning of the year Ant has been involved in a battle to acquire MoneyGram, the electronic overseas payments provider based in the US, but has faced opposition in the form of a rival bid from Euronet Worldwide. Senior figures in the US government have also protested that a takeover of this size by a China based company could constitute a national security risk.
Whilst MoneyGram is a huge deal for Ant, who have raised their bid for the company to $18 dollars per share, at a valuation of $1.2 billion, to try to get it over the line, it’s far from the only acquisition or overseas partnership that the company has been busy putting into place.
This week, Ant struck a deal with US based convenience store chain 7-Eleven, who have agreed to accept Ant’s third-party online payment service Alipay at 2,100 of its stores based in Malaysia, reports China Money Network. Malaysian third-party payments firm MOL will provide the underlying payments services.
The partnership will enable Ant to provide a better service to Chinese tourists in Malaysia as well as to engage Malaysian merchants for the first time, and it is all part of Ant’s aggressive expansion strategy.
According to China Money Network, Ant owns a 25%+ stake in One97 Communications, operator of India’s largest mobile payment and commerce platform Paytm, launched the Alipay+ project in Singapore last year to help build partnerships in the region and an overseas mobile ecosystem for Chinese travellers, and purchased a 20% stake, with the option to acquire another 10%, in a Thai online payment firm, Ascend Money.
In Europe, Ant has agreed deals with local merchants in The Netherlands, Belgium, Luxembourg, and the Czech Republic, and back in Asia, Ant recently invested $200 million dollars into Kakao Pay, a mobile payment solution developed by South Korea’s messaging platform Kakao Corp.
In the Philippines, Ant has invested in a financial venture, Mynt, from Globe Telecom, which provides micro-payment services and mobile loans. Globe has 66 million subscribers, which translates as more than 50% market share.
It’s also rumoured that Ant expects to launch an IPO soon, and is in the process of raising a $3 billion war chest to fund further acquisitions.
In short, Ant Financial is one of the world’s most important Fintech firms, with a global reach and funds available to fuel its acquisition led growth strategy. The MoneyGram deal, because of its strategic importance, being a US firm, if it goes through, will be seen as a coup for the company, but by no means is Ant putting all of its eggs in one basket.
As the company grows into a true tech giant, however, it is likely to find its path obstructed by some other major players, including, for example, Walmart, who, Paymnts.com reports, are preparing for a global price war over the cost of sending money abroad, dropping the price of transfers in the range of $50-$1000 dollars, for example, from $9.50 to $8, which will save consumer hundreds of millions of dollars annually, Walmart says.
The real winner here, it is to be hoped, will be the customer!