MICROCAPITAL BRIEF: Alipay, GCash Upgrade AlipayHK App for Users in Hong Kong to Send Remittances to the Philippines Using Blockchain

Mobile payment platforms Alipay, a unit of the China-based Ant Financial, and GCash, a unit of the Philippines-based Globe Telecom, recently partnered to extend the reach of AlipayHK, a mobile app that allows users in Hong Kong to send remittances, to allow for people in the Philippines to receive funds. The app utilizes blockchain technology, a tamper-resistant system that can be used to record financial transactions on multiple computers so that the data is not dependent on any single machine. Other features of AlipayHK include the encryption of user data, increased transfer speeds, “a competitive exchange rate with much lower transaction fees,” and the ability for senders and recipients to track the status of transfers as they are processed. Alipay CEO Jennifer Tan states “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.”

Alipay, which was founded in 2004 by the China-based Alibaba Group, is a third-party mobile and online payment tool for sending money to individuals as well as paying bills and making purchases both remotely and at points of sale via Quick Response (QR) codes. Alipay has 520 million users in 40 countries as of 2018.

Ant Financial was founded in 2014 by the Alibaba Group and manages Alipay as of 2018. Ant Financial has units dedicated to credit scoring, technology services for financial institutions, a wealth-management app, and an online bank for small enterprises. Although financial data on Ant are unavailable, the firm sold asset-backed securities valued at CNY 238 billion (USD 37 billion) during 2017.

GCash, which was launched in 1998, is an international micropayment service that operates via mobile phones and online. Its partners include government agencies, utility companies, cooperatives, insurance companies, remittance companies, universities and retailers. The GCash service is administered by Mynt, another wholly owned subsidiary of Globe Telecom. As of July 2017, GCash reported 4 million users and average transaction volume of approximately PHP 6 billion (USD 119 million) per month.

Founded in 1935 in Manilla, Globe Telecom is a publicly traded company providing mobile, fixed-line and broadband networks to individuals and businesses of all sizes. As of December 2017, it reported 61 million mobile subscribers, 1.4 million landline subscribers and 1.3 million broadband customers. For 2017, Globe Telecom and its subsidiaries reported consolidated annual revenue of PHP 135 billion (USD 2.7 billion) and pretax profits of PHP 22 billion (USD 431 million).

By Nicholas Galimberti, Research Associate

Sources and Additional Resources

Business Wire article
https://www.businesswire.com/news/home/20180625005561/en/AlipayHK-GCash-Launch-Cross-Border-Remittance-Service-Powered

Alipay website
https://intl.alipay.com

Ant Financial background
https://www.antfin.com/introduction.htm

GCash services
https://gcash.com/services

Press Reader article
https://www.pressreader.com/philippines/philippine-daily-inquirer/20170731/282359744786625

Globe Telecom annual report
http://investor-relations.globe.com.ph/content/dam/multi-microsites/docs/annual-report/2017/2017-Globe-Integrated-Report.pdf

Globe Telecom financials
http://investor-relations.globe.com.ph/sec-filings/audited-financial-statements.html

MicroCapital Brief; January 26, 2018; As China Tightens Online Lending Market, Ant Financial Pauses $37b in Annual Sales of Asset-backed Securities; Nexgo, Zhejiang Busen Garments Cancel Plans to Offer Loans
https://www.microcapital.org/microcapital-brief-china-tightens-online-lending-market-ant-financial-pauses-37b-annual-sales-asset-backed-securities-nexgo-zhejiang-busen-garments-cancel-plans-offer-loans/

MicroCapital Brief; June 20, 2018; I&M Bank Rwanda, Blockbonds to Roll Out Spenn, Mobile Banking App Based on Blockchain
https://www.microcapital.org/microcapital-brief-im-bank-rwanda-blockbonds-to-roll-out-spenn-mobile-banking-app-based-on-blockchain/

MicroCapital Brief; April 3, 2018; Ant Financial Buys 45% Equity Stake in Pakistan’s Telenor Microfinance Bank for $184m, Anticipating Synergies Between Alipay, Easypaisa
https://www.microcapital.org/microcapital-brief-ant-financial-buys-45-equity-stake-pakistans-telenor-microfinance-bank-184m-anticipating-synergies-alipay-easypaisa/