Alibaba And Tencent Compete For Remittance Payment Markets In Southeast Asia
Alibaba And Tencent Compete For Payment Markets In Southeast Asia
Chinese tech giants Alibaba and Tencent recently launched money-transfer services that allow Hong Kong-based workers from Indonesia and the Philippines to send money home cheaply and easily.
These moves are a first step in going after a global remittance business that moves more than $600 billion around the world annually. The initiatives are also part of the firms’ broader efforts to take their wildly successful WeChat Pay and Alipay mobile payment system overseas.
Alibaba’s financial affiliate Ant Financial called its Hong Kong remittance initiative “a starting point and a significant step in accelerating our pace to promote financial inclusion globally.” On the other hand, Tencent’s WeChat Pay, which is ubiquitous in China but has struggled to gain traction abroad outside of Chinese tourist destinations, is more circumspect about the goals for its Hong Kong We Remit service, although a spokesman allowed it was open to “all possibilities.”
Sending money across borders, however, is harder than it looks. That helps explain why both companies are working with a Hong Kong-based financial technology start-up, EMQ, which has regulatory approvals and bank partnerships in place across Southeast Asia and elsewhere.
The biggest attraction to the products of these companies is that none of them are charging fees, at least for now.
For now, WeChat and Alipay are focused on gaining acceptance. WeChat became operational in Hong Kong last year, working with EMQ and other partners including popular Filipino pawnshop chains Cebuana and Palawan.
Moreover, EMQ’s network shows where Tencent and Ant could be going. The company has regulatory approvals in Vietnam, Cambodia, India, Singapore, China, and Japan, which would allow clients to promptly scale up their processes.
Alibaba and Tencent face plenty of competition in remittances, not to mention the long list of technology and financial services companies that aim to compete more broadly in payments.