The constantly evolving Ant

As those who have picked up my recent books, you will know that I’m an avid observer of Ant Group and Alipay’s activities. After all, the company did become a 30,000 word case study in my book Digital Human. I haven’t written about Alipay for a while, but did note the release of Alipay Plus or, rather, Alipay+.

Alipay+ is a suite of cross-border digital payments and marketing solutions that enable merchants, including SMEs, to better serve their customers globally and, in a first of its kind example, Alipay+ announced yesterday that it will expand its destination to mainland China in preparation for the upcoming Asian Games in Hangzhou, China. Specifically, Kakao Pay of South Korea and the Touch 'n Go eWallet of Malaysia will be able to be used in the mainland .

With Alipay+, users of Kakao Pay and Touch 'n Go eWallet can now pay with their home apps when visiting China, transacting in their home currencies at Chinese merchants including food and beverage chains, convenient stores and souvenir shops among others.

I find this interesting in that Ant Group, the parent company that runs Alipay, has been growing significantly since I last looked, serving over 1.3 billion users and 80 million merchants, with total payment volume reaching ¥118 trillion RMB ($16.7 trillion) across more than 2,000 partner financial institutions in June 2020. Just think of those numbers*!

• 1.3 billion users
• 80 million merchants
• Processing ¥118 trillion RMB ($16.7 trillion)
• more than 2,000 partner financial institutions

Think of the tech stack you need behind such an ecosystem, and then think about that this is not just being used by Alipay, and neither just in mainland China. For example, Alipay+ has been implemented in Japan, allowing over a million merchants to take payments easily and seamlessly from international tourists; similarly, users of e-wallets including AlipayHK, GCash (the Philippines), Touch ’n Go eWallet (Malaysia), and TrueMoney (Thailand) are able to pay at over 120,000 merchants using their local mobile payment apps when traveling in South Korea.

Alipay+’s global merchant coverage has more than doubled over the past six months to over 2.5 million, as Ant Group announced at the Singapore Fintech Festival. Though having officially launched just a year ago, Alipay+ has already been adopted by over 10 major airports, nearly 200,000 taxis, over 90,000 convenience stores and 360,000 restaurants globally, along with major hotel brands, department stores and tourist facilities. At the online sphere, it serves thousands of online merchants, digital entertainment platforms and lifestyle services.

If you want to know more about the Alipay tech stack read Digital Human, but it’s gone a lot further than this in the few years since I wrote that book. Today, it’s all about building a seamless cross-border payments solution across Asia and, eventually, globally. After all, Ant Group has provided technical services to power PayTM across India, easyPaisa in Pakistan and connecting mobile wallets across Europe.

A good example of the global ambitions of Ant Group is when my family and I visited Lapland for Christmas last year and found Alipay everywhere and, if you think its just for Chinese tourists, think again.

Having said that, the focus internationally has been on enabling Alipay usage at point-of-sale with merchants. The shift today is to focus far more on enabling all mobile payment apps of each market to grow into “global players”, connecting them with global merchants, both online and offline, big and small, especially those  in South East Asia.

According to the Business Times:

A 2021 report by Euromonitor International found that Asia-Pacific’s e-commerce sales could nearly double to US$2 trillion by 2025. In a separate report published in December 2021, Deloitte also found that small businesses account for more than 85 per cent of cross border e-commerce in the region, amid increasing accessibility of digital platforms.

“Digital payments are the key to driving the digitalisation of business activities, as the last mile of a consumer purchase journey,” [Angel Zhao, president of Ant’s International business group] said, adding that fintech innovation could address the specific needs of SMEs.

This is fascinating as Asia has a pretty fragmented structure. Most countries have national systems that are different and, bear in mind, currencies change across borders as there is no regional structure. This has led to a lack of interoperability between existing digital payment solutions and differences in efficiency, availability and compatibility in terms of technical standards and protocols.

Ant Group believe that Alipay+ can solve these issues. It’s interesting to watch, especially as the company is not focused on how we pay, but how we shop. For example, when I first wrote about Alipay years ago, a clear difference in China stood out for me between what they were doing and what others, like Venmo and Zelle were doing in America for example. The difference? The Alipay open platform for merchants is very strongly geared towards loyalty and increasing sales.

The idea is that, as I walk past a store, the merchant can broadcast offers specific to me at that moment. This also extends to when I shop online too, and it is now something that Ant Group are offering across Asia. As the Business Times report continues:

Ant sees potential for SMEs to take a step further in the way they reach out to consumers. The group believes businesses can capture more revenue opportunities through digital marketing, by engaging digital wallet users from the very beginning of the customer journey – what it calls the “brand discovery” stage.

“For example, if you are buying a cup of coffee at a coffee shop, you only decide how to pay for it at the cashier. For online, people often only decide which payment methods to choose at the checkout page,” said Zhao.

She added: “We believe digital payments could change the traditional role of payments and expand to the ‘awareness phase’ of the purchase journey, and really evolve into an effective channel to better connect merchants and consumers.”

The group developed Alipay+ to go beyond payments, Zhao noted. It created digital marketing tool Alipay+ Rewards in either mini-programme or landing page format to allow e-wallet users to redeem or purchase vouchers from merchants.

With mobile wallets emerging as a dominant payment method both online and offline, the frequent “sticky” user behaviour makes e-wallets a “valuable and effective” channel for digital marketing, in turn driving online to offline conversions, she said.

I could go on, but I guess the real reason the company intrigues me is that they build and rebuild often and frequently. They reboot their infrastructure and technologies every three of four years, and focus with amazing capabilities to offer architectures geared for tomorrow.

This is the core point for me: how often do we reboot our systems and architectures? Do we operate a tech stack, or a system that is inflexible and rigid.

Ant Group demonstrates the very latest ways to deploy technologies for commerce, and are always worth a look.

 

Postscript:

In case you missed it, there's a very interesting report about how FinTech helped countries through Covid, which Ant supported with the Nanyang Technological University of Singapore here.