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China’s Ant Group Reduces Support For Overseas Fintech Firms As Change In Strategy

China’s Ant Group Reduces Support For Overseas Fintech Firms As Change In Strategy
With its new strategy of moving away from its earlier ambitions of becoming a global payments leader, China's Ant Group Co Ltd has been cutting down on funding and staff support to a number of the e-wallet firms overseas in which it had invested, claimed reports quoting sources with knowledge of the matter. 
In late 2019, a change at the helm and a reworking of priorities as it planned for its IPO as well as regulatory challenge sin its home market of China forced the shift in strategy by the Alibaba-backed fintech giant.
According to reports quoting more than a dozen executives who work or have worked with Ant in nine countries, the company is scaling back on the hundreds of millions of dollars that it used to invest every year in overseas e-wallet firms as a subsidy for user growth in the sphere of digital payment and other financial services. The company is also bringing back home its employees from foreign countries.
No comment on the issue from Ant was available.
The reports also claimed that despite efforts to make it a reality throughout 2019, an ambitious project of the company to create a global payments infrastructure based on a common QR code system that will connect all the e-wallets that the company had invested in has been very quietly halted.
Had the project gone through, it would have allowed the e-wallets to be used in regions outside of their local markets and in those countries that where there was presence of Ant's partners. The success of the project could have also propelled to the pedestal of a global payments leader. Ant is best known for its Alipay service that serves mainly Chinese customers.
Ant said in a statement it "has always been and continues to be committed to working with global partners, including e-wallet operators, to make financial services more inclusive for consumers and small businesses."
Investments in more than a dozen fintech companies with e-wallet services have been made by the Chinese firm. These fintech companies allow consumers to store funds and make digital payments even without a bank account. The investments began with a $500 million-plus stake in India's Paytm in 2015 while most of the investments of the company are in Asia and include Mynt in the Philippines, DANA in Indonesia, and EasyPaisa in Pakistan.
No comments on the issue were available from Paytm, DANA and EasyPaisa.
However, investing overseas is being continued by Ant. A tenth of the proceeds from its dual listing in Hong Kong and Shanghai have been earmarked for cross-border expansion by the company, according to the prospectus for its listing.
Announcement of an investment of $73.5 million in Myanmar e-wallet firm Wave Money was also made by Ant in May while also putting in an application for a digital wholesale banking license in Singapore.
But reports claimed that the company has halted further aggressive investments in overseas e-wallet firms.

Christopher J. Mitchell

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