Philippine Banks Boom Despite the Politics
12 April, 2017
Inside Ant Financial’s Nest
1 May, 2017Euromoney, April 19 2017
Ant Financial really wants MoneyGram, and has increased its bid by 36%. It’s a whole new style for the company, but getting it over the line will need more than money: it will mean convincing CFIUS… and Trump.
Ant Financial’s revised $1.2 billion bid for MoneyGram, a 36% increase on the price it offered in January, tells us several things about the company’s ambition.
One, it’s prepared to pay top dollar for a business it considers transformative. Two: that it believes it can navigate likely US objections to a Chinese takeover of a financial services company rich with US data.
Euromoney’s cover story for May will look in detail at the Chinese fintech – or, as they insist on saying internally, techfin – following a series of meetings at the company’s Hangzhou HQ.
One of the things that came out of those meetings is that MoneyGram is a wholly atypical acquisition for Ant.
International expansion is a clear priority of Ant Financial – in our cover story, a senior executive tells us the company wants two billion clients globally – but so far the affiliate company of e-commerce firm Alibaba has not done so through outright acquisition, which is what the MoneyGram bid involves.
Instead, the priority so far has been to buy a significant minority stake in a local business, and then apply Ant’s tech – principally its Alipay payment-and-lifestyle wallet approach – into the back-end of that business.
It takes this approach for two main reasons: the local business understands the local culture and the needs of customers, and it already has the licences and compliance procedures in place that Ant, in a new country, does not.
The clearest example of this approach is Paytm in India, in which Ant is thought to be a 40% shareholder – it won’t disclose the precise number – and which already has 215 million customers domestically, getting on for half the 450 million users the Alipay system has. But one can also see the same approach in action with Kakao Pay in South Korea, with Mynt in the Philippines and in Ascend Money in Thailand.
