Ant Financial, the financial services affiliate of China’s Alibaba Group which operates the Alipay mobile payment service, has confirmed about its plans to expand its cashless payment business to overseas markets such as South America and Africa in the next five years, South China Morning Post recently reported.
The company intends to promote its business in developing countries where mobile pay is still a relatively new phenomenon.
Besides the expansion plan in South America and Africa, Ant Financial recently has promoted the mobile pay service and invested in Europe, Southeastern Asia, and India as well.
Kenny Man, the head of International Investment at Ant Financial, announced at a Venture Capital (VC) forum recently said that they would target developing countries and fuel the mobile pay service globally.
Countries like Mexico, India, and Brazil are optimum markets for Ant Financial because they boast a large population from which the Chinese giant would able to build a strong customer base. In addition, cashless payments business in those areas is also soaring.
According to Man, using mobile pay services in those countries will be safer than carrying actual hard currency, but the service providing platforms themselves may confront a risk of being hacked.
To ensure security, Ant Financial supports their international partners with technology and risk management strengths.
For example, the Hong Kong branch of the fintech, AlipayHK, teaming up with the Philippine virtual wallet app GCash, launched a blockchain-based online remittance service in June 2018.
AlipayHK helped secure data and protect user privacy in cross-border payment systems and international remittances.
On June 8, the company announced that it had closed a Series C funding round that totals a whopping USD 14 billion. The round gives Ant Financial a valuation of USD 150 billion, making it the most valuable privately-held tech firm in the world.
According to Ant’s official statement, the money will go towards developing technology, hiring local employees, and assisting a digital transformation in developing countries.
If the large growing space and big opportunities in emerging markets are pull forces that motivate Ant Financial’s global expansion, the development bottleneck in Chinese domestic market may be a push force.
Data released by the market research firm Analysys suggested that Alipay and WeChat Pay accounted for 93% of China’s mobile payment segment, among which Alipay took the lead with a market share of 54% in Q1 2017.
It signals that Chinese market has been dominated by the two powerhouses and Ant will seek breakthroughs via overseas expansion.
Ant has already established infrastructure for this expansion. According to the company’s official data, the Alipay’s outbound traveling service has covered more than 40 nations.
Furthermore, under a “local partnership + technology exportation” model, Ant developed several localized versions of Alipay in 9 countries, appealing to over 3 billion population worldwide.
To make more international consumers engage in Alibaba’s online shopping platform, Jack Ma, the co-founder and executive chairman of the conglomerate, visited heads in many Southeast Asian countries and attempted to globalize Alipay through cooperation with local organizations.