Filipino workers in Hong Kong, of which there are more than 180,000, received a potential boost to their finances this week as Jack Ma, the billionaire co-founder of Alibaba, which counts fintech firms Ant Financial and Alipay as subsidiaries, made good on a promise he had made years ago to help his Filipino friends spend less on fees when sending money back home to friends and relatives.
Ma, and Alipay have introduced a new money transfer service, built using blockchain distributed ledger technology, and compatible with their AlipayHK Wallets, exclusively for transfers between Hong Kong and the Philippines; a $33 billion dollar per annum market, and the world’s third largest remittance corridor.
Standard Chartered, the British bank, will act as an intermediary bank between AlipayHK and GCash, a mobile money wallet owned by Filipino telecommunications Globe Telecom, and operated by Mynt, with more than 8 million users in the country. For the first three months, all transactions made between the digital wallets will be fee-free, and Ma has outlined his plans to make transfers as cheap as possible, even for values as small as 1 cent. Typically, banks charge around $18HKD per transaction, plus added costs and fees, according to the South China Post.
Jenifer Tan, CEO of Alipay’s Operations in Hong Kong, has commented:
“What used to be a long process of physically going to a remittance booth, queuing in line for hours and filling out forms, is now easily and securely done over the mobile phone in just a few seconds.”
It’s certainly a bold move for Alipay to be adopting a blockchain solution at a time when cryptocurrencies are being pushed back towards the margins of the global financial system. That said, most major financial players are looking at blockchain technology closely, with Santander already having launched a blockchain payments service to send money between Spain, the UK, US, Brazil and Poland, using Ripple, the technology in which Santander is heavily invested.
Reducing or even eliminating fees would help Alipay secure more business in Hong Kong and the Phillipines, and lead to more and more people using their mobile wallets, which may be the long game the company has in mind.
Alipay is still smarting from Ant Financial’s failed attempt to acquire MoneyGram, the US money transfer firm which controls a large proportion of the global remittance market.
Ma is now attempting to undercut MoneyGram’s prices in a highly lucrative market. The charismatic entrepreneur told journalists:
“At the time we wanted to [buy] MoneyGram and overhaul it to help people all over the world solve this issue. Due to reasons from the US our deal with MoneyGram did not succeed, so I said, ‘Let’s make one better [than MoneyGram]’ that uses the most advanced technology.”
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