I was amazed to see the news this morning that Alibaba, the Chinese equivalent of eBay and PayPal, has acquired China Union Pay.
This is fantastical news and builds upon the recent announcement that Alibaba will get into banking.
From Breaking Views:
Alibaba isn’t a bank. But for customers it’s getting hard to tell the difference. Users of China’s dominant e-commerce website can now deposit funds, make investments, take out loans and even give out gifts of virtual cash. In taking on China’s lenders, Alibaba and its online rivals may be taking on bank-like risk.
From The Australian:
If it took Apple seven years to become the world’s biggest music retailer, Google 18 months to grab 85 per cent of the global GPS market and less than three years for Alibaba to become a $US16bn ($17.7bn) lender, then how long will it take for the banking oligopoly to find its lunch is eaten and digested.
It has been labeled a “blood-sucking vampire” by a prominent commentator on state-run television. Executives at China’s largest banks have called for regulators to curb its rapid expansion. The focus of this ire is Internet financing, specifically Yu’E Bao, the fund pioneered nine months ago by Alibaba Group Holding Ltd.’s online-payment affiliate Alipay. Its ease of use, involving a few taps on a smartphone, has drawn deposits from 81 million customers, more than the population of Germany, as they chase returns higher than China’s banks can offer. The total exceeded 500 billion yuan ($80 billion) as of Feb. 28, according to the official Xinhua news agency.
The news this morning that it has acquired China Union Pay for a mix of cash and share options worth 600 billion yuan ($100 billion) comes as no surprise and should send a shudder through all banking markets as it sets the lead for eBay, Apple, Amazon and others to follow.
Watch this space.
Postnote: this was our April Fool this year but, ya never know, it could happen and, by the number of tweets, I'm guessing some of us believe it will!