China’s Ant Financial, thwarted in the US, is expanding rapidly in Europe
  • Vote Up0Vote Down venynxvenynx
    Posts: 2,373Member
    Ant Financial is expanding rapidly outside of its home market, mainly to
    serve legions of big-spending Chinese tourists already familiar with
    its platform. A key question is whether the company, which is valued at
    more than Goldman Sachs and Morgan Stanley combined, will pursue Western
    consumers as well.To get more china finance online news, you can visit shine news official website.

    Ant Financial runs Alipay, which says the payment service and its
    affiliates have more than 1 billion (pdf) annual active users around the
    world. Alipay’s most recent deal outside of its home market is with
    Barclaycard, which processes almost half of Britain’s debit and credit
    card transactions. The agreement lets UK merchants accept Alipay
    smartphone transactions without having to replace their payment
    equipment. Ant Financial is an affiliate of the Alibaba e-commerce

    On their own, Chinese tourists are an enormous market: they spent $258
    billion in 2017, almost double that of second-ranked US holiday-goers.
    Alipay is available in 54 markets, and is a partner with the likes of
    India’s Paytm (Ant also has a stake in the fast growing payment
    service). Observers have long seen Alipay’s Chinese tourist strategy as a
    “spearhead” to one day go after non-Chinese customers.

    Recently, Ant’s prospects for global expansion have become much more
    complicated. The US and China are locked in a trade war, and American
    officials have been warning allies about what they say are security
    risks of using equipment made by Chinese telecom group Huawei.

    Ant has been under far less scrutiny than Huawei, which was founded by a
    former military engineer. Even so, the US blocked Ant’s acquisition of
    payment-transfer company MoneyGram in January 2018, citing national
    security concerns. Britain has been more open minded—earlier this year,
    Ant purchased UK payments group WorldFirst (paywall) in a deal
    reportedly worth around $700 million, making it the company’s biggest
    push yet into western markets. WorldFirst shuttered its US operations,
    apparently to avoid US interference in the deal.

    Ant CEO Eric Jing says the company got its name because ants are small
    and its service was for the “little guys.” These days, though, the
    company is a behemoth. It raised almost as much money last year as all
    EU and US fintech firms combined, giving it a $150 billion valuation,
    the most in the world for a technology startup. While best known for
    Alipay, Ant also offers a credit rating system and a giant money market
    fund. After social-media apps, Alipay is the most-used app in the world.

    Chinese regulators have taken note of Ant’s fast growth and potentially
    systemically important size. As scrutiny grows, the company has shifted
    its focus from offering its own financial products to running a
    technology platform for other financial companies. Its tech is plugged
    into more than 200 institutions, including banks, wealth managers,
    brokerages, and insurers.

    Financial executives in New York and London have mixed opinions about
    Ant and Alipay. Some think the Chinese company’s QR-code smartphone
    wallets could one day compete with old fashioned payment cards in the
    west. Others think behaviors are slow to change and that contactless
    card payments are already entrenched.

    A year ago, BlackRock co-founder Robert Kapito said he was “shocked”
    (paywall) by Ant’s valuation (higher than that of BlockRock, the world’s
    biggest asset manager), and worried its rise was a sign of tech
    disruption coming for incumbent financial companies. The trade war and
    tighter regulatory scrutiny have altered the playing field for Ant, but
    execs around the world are keeping a close watch on the Chinese
    company’s western ambitions.

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