Ant Group, the company behind China’s popular mobile payment service Alipay, is seeing an accelerated adoption rate for its payment services outside of China, less than two years after launching a pilot cross-border payment project.
Why it matters: The company has pushed to expand in Asia and Europe as countries begin to reopen and offline shopping activities recover.
- Ant’s businesses in China have faced increased regulatory scrutiny since halting its massive IPO in late 2020. At the same time, China’s consumption has entered a slow period due to recurring pandemic outbreaks and external geopolitical pressure.
Details: On Monday, Singapore-based payment platform 2C2P and Ant entered a strategic partnership, with Ant becoming the platform’s majority shareholder. During the first week of April, Ant saw more than 70,000 merchants outside of China sign up for a business-to-business mobile payment service called Alipay+. The service, launched in September 2020, allows people and merchants from different countries to transact using their local digital wallets.
- With Alipay+, Ant provides the technology backend and related financial service for digital wallet operators and merchants worldwide, connecting shops with various digital wallet users. For example, the service allows people with a supported Malaysian payment app to shop and pay with their local app in some shops in South Korea.
- The service supports various digital wallets worldwide, including Malaysia’s Touch ‘n Go eWallet, South Korea’s Kakao Pay, the Philippines’ GCash, Thailand’s TrueMoney, Indonesia’s Dana, and Europe’s Klarna.
- In early April, German drugstore chain Müller, South Korean chain store GS25, and Malaysian company Razer Fintech announced their integration with Ant’s service, allowing their merchants the ability to transact using overseas digital wallets.
- In March, Ant Group appointed Jia Hang as the new regional head in Southeast Asia. Jia is expected to expand Ant’s ongoing plan to attract more small merchants in the region to use its services.
- Ant has already integrated more than 1 million offline merchants in Asia and Europe, covering industries including food and beverages, tourism, hospitality, and retail, according to a Monday company statement shared with TechNode.
Context: Ant Group has quietly pushed to expand its businesses outside of its home country as China intensifies regulatory pressure in the fintech sector.
- In November 2020, Ant Group suspended what would have been a record-setting $34.5 billion IPO offering in Hong Kong and Shanghai.
- Alibaba, which has a 33% stake in Ant, was fined RMB 18.2 billion ($2.8 billion) for antitrust violations last April.
- While China adheres to a strict dynamic-zero Covid-19 policy to control local outbreaks, many other Asian countries have begun moving to a full reopening since the beginning of April. South Korea and Singapore reopened to fully vaccinated visitors on April 1, and Indonesia has lifted all quarantine rules for international travelers.