Ant Financial, the parent company of Chinese mobile wallet giant Alipay, is reportedly in talks to acquire London-based international payments provider WorldFirst for $700 million, according to Financial Times. WorldFirst facilitates cross-border money transfers for companies and consumers, with offices in Africa, Asia, Europe, and the US.
Acquiring WorldFirst could be instrumental in driving Ant Financial’s initiatives across several segments of the payments industry.
- The rumored acquisition wouldn’t be Ant Financial’s first push into the cross-border space. Ant Financial pursued an acquisition of legacy remittance firm MoneyGram for $1.2 billion last year, which was rejected by the Committee on Foreign Investment in the United States (CFIUS) over national security concerns. That acquisition would have given Ant Financial access to a network of 2.4 billion bank and mobile accounts in over 200 countries and territories. However, since failing to acquire MoneyGram, Ant Financial has made other moves in the remittance space: It partnered with GCash to offer blockchain-enabled real-time remittances between Hong Kong and the Philippines through AlipayHK, its Hong-Kong based mobile wallet, for example. Acquiring WorldFirst could give Ant Financial another opportunity to gain access to the digital cross-border space through remittances as the space scales: Business Insider Intelligence expects digital remittances to grow at an 11.5% compound annual growth rate (CAGR) from $225 billion in 2018 to $387 billion in 2023.
- WorldFirst could help Ant Financial establish a larger presence in the UK for Alipay. Ant Financial raised $14 billion earlier this year — valuing the firm at approximately $150 billion — which it said it would use in part to speed up Alipay’s globalization. Alipay counts 700 million users globally and has been on an international expansion push in an effort to increase global market share amid domestic competition in China from its biggest rival, Chinese mobile wallet WeChat Pay, which counts 800 million users and has also been expanding globally, as well as government regulations that could inhibit volume and growth potential in China. WorldFirst could serve as a gateway for Ant Financial to expand Alipay’s acceptance network in the UK — Alipay acceptance in the UK increased by 60% this year, with retailers like Harrod’s and Selfridges, and stores at Heathrow Airport accepting the mobile wallet — as well as in other markets that WorldFirst operates in, which can ultimately increase Alipay’s volume and market share.
Source: Business insider