Chinese Mobile Payments Titan Ant Financial Offers Investor Day Insights

September 26, 2019         By: Steven Anderson

The Chinese are actually so much into mobile payments that the government, not so long ago, had to step in and make it clear that Cash Is Still A Thing. Ant Financial, the company behind the popular Alipay mobile payments system, stepped in and delivered some insights from its recent Investor Day proceedings, which it subsequently filled us in on.

First, Ant Financial demonstrated just how big Alipay really is, posting a 20 percent growth in the six months as of December 2018. Between Alipay proper and its various “local e-wallet partners,” a total of 1.2 billion users worldwide is now being reached. Since Alipay launched its globalization strategy back in 2016, the coalition saw an overall growth of 260 percent in just the last three years. 

Just in case some think that that’s the result of a penetration market strategy like I did at first, the numbers don’t skew quite that hard. In fact, as of June 2019, Alipay counted over 900 million annual active users in China. Better yet, they’re extremely active; 80 percent used at least three different kinds of service offered by Ant Financial, from the wealth management to the insurance and credit / microfinancing services.

Finally, Ant Financial has been actively considering the future and has determined blockchain will be a major part of things. Thus, it’s been opening up its studies on blockchain to various potential and current partners, including banks, insurance companies, and even elements of the government to help find ways to improve efficiency and reduce costs with the still-new technology.

No matter how you slice it, Ant Financial—and by extension Alipay—had a good run. There were some huge gains here, owing in decent part to their globalization strategy, which seems to have worked wonders. Of course, there will inevitably come a point where they really can’t grow anymore, so there need to be plans for post-plateau operations, but by then the company will likely be sufficiently flush that there’s not much to worry about anyway.

Mobile payments are still a big deal in China, and Ant Financial is at—or at least near—the tip of the spear on this one. That’s good news for the company, though it may ramp up government involvement down the line.