Alibaba Group Holding Limited, the Chinese e-commerce and financial services conglomerate has made a significant move into the remittance industry. The company’s subsidiary Ant Financial Services Group has acquired MoneyGram International Inc. for $880 million.
The acquisition of MoneyGram not only offers Ant Financial a stronger foothold in the remittance sector but also gives it a unique opportunity to expand its services across the globe. MoneyGram and its counterpart the Western Union have been the leading providers of cross-border money transfer services in the world. The Dallas-based company currently has a network of over 350,000 outlets in retail shops, banks and post offices in almost 200 countries.
According to media reports, the acquisition of MoneyGram by Ant Financial still needs to be approved by the Committee on Foreign Investment in the United States (CIFIUS). The CIFUS approval is necessary for the acquisition of any domestic asset by a foreign company. In this case, Ant Financial is a Chinese company, and the growing tensions between the USA and China are expected to influence the committee’s response.
Apart from the global remittance segment, Ant Financial is also working on expanding its Alipay mobile wallet service to over 2 billion customers. The platform with 450 million users is exploring ways to broaden its infrastructure to support a four-fold increase in user base.
The CEO of Ant Financial, Eric Jing was quoted on a financial news portal saying,
“We have an ambition to be a global company… So, my vision (is) that we want to serve 2 billion people in the next ten years by using technology, by working together with partners… to serve those underserved.”
If things go according to plan, Alipay will soon integrate blockchain and artificial intelligence components into its system. The use of distributed ledger technology will enable the company to make its services much faster and cost efficient while improving the platform’s overall security.