Alibaba af­fil­i­ate forms part­ner­ship with the na­tion’s TNG to roll out Ali­pay-style sys­tem

China Daily (Hong Kong) - - BUSINESS - By HE WEI in Shang­hai hewei@chi­nadaily.com.cn

Ant Fi­nan­cial Ser­vices Group plans to roll out a mo­bile pay­ment ser­vice in Malaysia based on Ali­pay as it bids to ex­pand into the lu­cra­tive South­east Asian mar­ket.

The af­fil­i­ate of Alibaba Group Hold­ing Ltd has an­nounced it will form a joint venture with Touch’n Go Sdn Bhd, or TNG, which is part of Malaysian con­glom­er­ate CIMB Group Hold­ings Bhd.

Fund­ing will be used to cre­ate an on­line and off­line pay­ment provider, which will “de­liver mo­bile wal­let so­lu­tions”, and other re­lated fi­nan­cial ser­vices, the com­pa­nies said in a state­ment.

But de­tailed fi­nan­cial fig­ures re­lated to the deal were not re­leased.

“TNG’s joint venture will def­i­nitely spur the growth of the mo­bile pay­ments mar­ket in Malaysia,” said Quah Mei Lee, a dig­i­tal trans­for­ma­tion in­dus­try prin­ci­pal at con­sul­tan- cy Frost & Sul­li­van Asia Pacific.

TNG runs a con­tact­less card busi­ness of the same name in Malaysia, which is used by cus­tomers to pay for toll roads, pub­lic trans­port and park­ing.

By adopt­ing Ali­pay app tech­nol­ogy, its 10 mil­lion ac­tive card clients will be able ac­cess more ser­vice on their mo­biles such as e-com­merce.

“TNG is look­ing to ex­pand its mar­ket through Ali­pay,” said Quah, who ex­pects the $1 bil­lion mo­bile pay­ment ser­vices mar­ket in Malaysia to grow at a com­pound rate of 28.7 per­cent by 2021.

Ant’s move mir­rors a se­ries of other part­ner­ship deals forged with com­pa­nies in In­dia, Thai­land and In­done­sia, where sim­i­lar dig­i­tal pay­ment ser­vices have been wheeled out.

Paytm, in which Ant holds a mi­nor­ity stake, re­ported it had 220 mil­lion users in In­dia by Fe­bru­ary.

“We hope to launch a money-mar­ket fund and a credit-scor­ing sys­tem sim­i­lar to the port­fo­lio of­fered by Ant in China,” Vi­jay Shekhar, chief ex­ec­u­tive of­fi­cer of Paytm in In­dia, said in April.

Be­yond the do­mes­tic mar­ket, China’s big two in­ter­net play­ers, Ten­cent Hold­ing Ltd and Alibaba, are ex­tend­ing their fight for on­line supremacy in dig­i­tal pay­ment ser­vices. Ten­cent’s WeChat, which has nearly one bil­lion ac­tive users and is clos­ing the mar­ket share gap with Ali­pay, has ap­plied for a li­cense in Malaysia.

“This will al­low us to of­fer lo­cal pay­ment ser­vices via the app,” Grace Yin, di­rec­tor of WeChat Pay’s global oper­a­tions, told a tech­nol­ogy con­fer­ence in Hong Kong ear­lier this month. Ini­tially, this will tap into the grow­ing mar­ket fu­eled by Chi­nese tourists in the re­gion, Li Chao, a se­nior an­a­lyst at iRe­search Con­sult­ing Group, con­firmed.

“But fol­low­ing in the foot­steps of Chi­nese tourists is only the start for Ali­pay and WeChat,” Li said. “Tap­ping the lo­cal mar­ket will pro­vide a more sus­tain­able growth path.”

PRO­VIDED TO CHINA DAILY

A wo­man leaves a CIMB bank branch in Putrajaya, Malaysia.

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