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Asian firms have leapfrogged ahead, offering a new model of financial technology. Exhibit A is Ant Financial, a payments company affiliated with Alibaba, one of China’s two giant internet firms (the other is Tencent, whose WeChat messaging app is ubiquitous and supports payments). Ant is popular in China and has ambitions outside it. Already the world’s most valuable “fintech” firm, worth $60bn, it has 520m payments customers at home and its affiliates abroad have 112m, mainly in Asia. In May it signed a deal to install its payments system in millions of American retail outlets. Ant is in the process of buying MoneyGram, a Texas-based money-transfer firm active in over 200 countries.
One admired boss in the conventional banking industry says Ant keeps him awake at night. For protectionists, the firm is evidence of a Chinese plot to control the world’s financial plumbing. For consumers, it could boost competition in a cosy industry.
Ant was spun out of Alibaba in 2014. Its core business is enabling payments by a vast army of customers to the 10m or so merchants who use Alibaba’s e-commerce sites. This accounts for over a quarter of its revenues, according to CLSA, a brokerage. And it gives Ant huge scale at home. China’s internet-payments market is the world’s biggest, reckons Goldman Sachs, with $11trn in transactions last year, twice the size of America’s credit- and debit-card industry. Ant controls 51% of it. The firm is 16 times larger than PayPal, an American counterpart, on this measure.
