Ant Financial continues expansion in high growth Asia Pacific markets

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Alibaba affiliate Ant Financial services, which operates payment platform AliPay, has been purchasing stakes in various digital payment platforms as a part of its global business expansion strategy. Both South Korea and Philippines are strong emerging markets for mobile payments. Ant Financial has already set its foothold in India through equity holding in Paytm and in Singapore through M-Daq. In addition, it is focusing on strengthening its market position in the US.

The company has made USD 200 million investment in Kakao Pay owned and operated by South Korean internet service provider Kakao Corp whose worth is USD 5 billion. It is an integrated service of Kakao with other solutions, which it planned to spin off as a separate subsidiary in April 2017. The company holds major market share in South Korea and has wide range of services including KakaoTalk, a message platform and media sharing solution KakaoStory. Under this deal, South Korean customers on Alibaba e-commerce platform will be able to utilize Kakao Pay as a payment option for Alibaba owned Tmall and Taobao marketplaces. Additionally, AliPay will be accepted by approximately 34,000 vendors in South Korea.

It has also bought stakes in Philippines based fintech firm Mynt, which is a subsidiary of Globe Telecom. Mynt has around 3 million users and has two service offerings. It has digital payment system GCash that can be utilized for various financial transactions including online payment and Fuse Lending that offers personal and business loans.

It also purchased US based payment solution provider Moneygram in January, 2017 for USD 880 million and made investment in Thailand based Ascend Money. Ant Financial is also on the way to close a USD 3 billion debt funding round which would also be utilized for investments and acquisitions.

In South Korea, Kakao Talk has around 50 million users which would serve as a ready customer base for Kakao Pay. However, it faces stiff competition from Samsung Pay, Naver Pay and Lotte L Pay. Through partnership with Ant Financial, Kakao Pay will gain access to 450 million global users of AliPay. Additionally, it will also gain access to alternate financial services such as loans and financing in which AliPay is already an established player, keeping it ahead in competition. Smartphone penetration in Korea is around 73% which is expected to be beneficial for both Kakao Pay and AliPay towards mass adoption of these payment solutions.

The mobile wallet market in Philippines in terms of transaction volume is projected to reach 1,446 million in 2021 from 284 million in 2017; recording a CAGR of 50.2%.

To know more and gain deeper understanding of how mobile payment industry is shaping up globally, click here.