Transferwise announced today that its users will be able to send Chinese yuan to Alipay users from 17 currencies, expanding the reach of remittance services for both services.  

Why it matters: High fees for sending remittances through banks—an average of 7% globally—leave an opening for services which add convenience and cut costs. 

  • British firm Transferwise has 6 million users, compared with Alipay’s 1.2 billion users globally, and this partnership helps both gain ground in the billion-dollar global remittance business. 

Details: In its statement announcing the partnership, Transferwise said that “money will be sent with the real exchange rate—like the one you see on Google.” 

  • Transferwise users can send up to five transfers to Alipay accounts per month, capped at RMB 31,000 each (around $4,400), with an annual limit of RMB 500,000.
  • The recipient Alipay account must belong to a Chinese citizen and have a bank card linked. 
  • Kristo Käärmann, co-founder and CEO of Transferwise, said that the partnership was “one of the most requested features from our users.”

Context: The partnership with Transferwise is far from Alipay’s first deal on cross-border transfers—a similar integration with Worldremit was announced in January, and one with Finablr (holding company for Travelex and UAE Exchange) in November last year.

  • Partnering with Transferwise signals Alipay’s continued willingness to work with companies which already have market share and access to the European market, which some analysts believe have fewer financial regulatory pitfalls than the US. 
  • Ant Financial has also launched its own initiatives including a blockchain-based cross-border remittance service for users in Hong Kong and the Philippines. 
  • Users in China are the second largest region for remittance—in 2018, $67 billion flowed in.
  • Remittances to low- and middle-income countries are on track to reach $550 billion in 2019 and $597 billion by 2021, according to the World Bank. 

Lavender covers regulation and its effects on people. She previously worked in a policy advisory analyzing China’s internal governance for foreign governments and multinationals. A History graduate from...