Ant Financial Seeks Licenses in Asia as Global Push Accelerates

  • Alibaba affiliate seeks stored-value license in Hong Kong
  • PBOC rules to have limited impact on overseas users, Peng says

Alibaba Group Holding Ltd.’s finance affiliate is targeting operating licenses in Hong Kong, South Korea, India and other Asia-Pacific markets as it prioritizes international expansion.

Zhejiang Ant Small & Micro Financial Services Group is seeking a license from the Hong Kong Monetary Authority for users to store prepaid cash or link their bank cards to accounts, said Sabrina Peng, vice president of international business for the company known as Ant Financial. The HKMA last month said it has received more than 20 applications for such facilities and plans to start granting licenses this year.

Ant Financial, which is said to be valued at around $60 billion after raising $4.5 billion last month, has increased bets beyond its home market with acquisitions from India to Korea. The owner of Alipay has tied up on global payments with firms such as Uber Technologies Inc. and hired former Goldman Sachs Group Inc. senior partner Douglas Feagin in its push for international business.

“We accelerated international expansion last year,” Peng by phone from the company’s headquarters in Hangzhou. “Our tactic is to look for partners in all countries to help us achieve the goal of offering inclusive financing globally. In terms of allocating capital and human resources, the international push is top priority of our strategy.”

The firm has received a payment bank license via Paytm, India’s largest payments provider with about 122 million users as of January, Peng said. In South Korea, it won preliminary approval of an Internet bank license through SK Telecom Co., she added.

Ant Financial is considering an initial public offering on the Shanghai stock exchange as early as this year, people familiar with the matter said last month. 

Controlled by billionaire Alibaba founder Jack Ma, Ant Financial has evolved from an outsider in a tightly controlled industry to an online giant now working with the largest state players, including China’s sovereign wealth fund and the nation’s second-largest bank. The firm now runs China’s biggest online payment service, Alipay, with 450 million users, and controls the company that manages Yu’E Bao, the nation’s largest money-market fund.

That came as China’s central bank tightens regulations governing the nation’s hundred of online-payment firms. Under new rules to be effective July 1, real-name registration is required for all non-bank payment accounts along with limits on the amount an individual can pay online through third-party payment accounts. That includes Alipay, the most popular way for people to shop on Alibaba’s platforms, and Tencent Holdings Ltd’s Weixin Payment. Users need to provide at least five verification methods to have a so-called “comprehensive account,” allowing annual online or mobile payments of as much as 200,000 yuan ($30,500) per person.

Alipay said last week customers who don’t have a mainland China bank card won’t be able to keep money in accounts from July 1, though overseas users will still be allowed to use other payment methods, such as credit cards, to shop on Alibaba websites. Only 9 percent of the number of transactions conducted by overseas customers use deposits in Alipay, with the rest paying through bank cards.

Alipay is working with the regulator on ways to minimize the impact on international users, Peng said.

Yu Feng, head of Alipay product management, said the firm is working with entities such as the public security bureau and telecommunications networks to make it easier for domestic customers to verify their identities.

— With assistance by Jun Luo, and Lulu Chen

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