Ant Financial, the financial affiliate of Chinese e-commerce giant Alibaba, announced today a US$ 200 million investment in Kakao Pay, the soon-to-launch mobile finance subsidiary of Kakao Corp, parent to South Korea’s leading mobile messaging platform Kakao Talk.

Kakao, which now claims 48+ million users, has launched its mobile payment feature Kakao Pay last year. The platform has accumulated more than 14 million members and gradually evolved from payment transactions to offer innovative and convenient mobile financial services including bill payment, remittance and membership management.

Kakao’s board decided in January to form a separate entity for its Kakao Pay financial service brand, tentatively named Kakao Pay Corp. Young-Joon Ryu, who currently leads Kakao’s fintech division, will head the new company.

Under the agreement, Ant Financial, operator of China’s ubiquitous mobile payment tool Alipay which claimed 450 million users, will offer its wide range of digital financial services through Kakao Pay in South Korea. The new company will increase the number of online and offline merchants by merging Alipay’s 34,000 merchants into Kakao Pay’s system, providing merchants a much larger customer base, according to the company statement.

The partnership would be a win-win cooperation between the two parties as Kakao Pay can gain access to Alipay’s existing online and offline resources and technological support, while Alipay can leverage on Kakao’s huge user base to enter the Korean market.

While leading the domestic mobile purchase transformation, Ant Financial is also taking aggressive steps in overseas expansion through partnerships with local players. Alipay has been supported widely both online and offline in Japan, Korea, and Europe.

Investment is another major channel for the Chinese firm to penetrate overseas markets. Alibaba announced an undisclosed investment into payments service Mynt, a unit of Philippine telco Globe Telecom. It has acquired a 20% stake in Thailand’s third-party payment company Ascend Money last year and has invested in Indian’s PayTM in 2015.

As service first boomed in China, it’s natural for Alipay to take overseas payment made by Chinese users – whether made online or on a vacation abroad, as their first frontier when tapping overseas markets. The company noted that Chinese visitors and tourists will continue to enjoy a broader payment experience in South Korea with Alipay, and also Kakao Pay users will enjoy more digital financial services provided by the growing global footprint of Ant Financial.

On the other hand, the tie-up will benefit Kakao Pay which is facing a crowded local market with competition from Naver Pay (operated by South Korea’s top search engine), Samsung Pay, and retail giant Lotte Group’s L Pay.

“South Korea is an important market for Ant Financial in its global expansion, and we see many opportunities in the market for innovative services and growth in mobile payments. Given Kakao’s leading mobile platform offering and vast customer base, we believe we can bring Ant Financial’s broad experience in digital payments and technology-driven financial services to offer exciting and innovative products to South Korean customers,” said Douglas Feagin, President of Ant Financial International.