Alibaba bets big on cheap international fund transfers
ASIA is powered by migrant workers moving across the economy.
There are hundreds of thousands of workers from India, Bangladesh, Sri Lanka, China, Thailand, and even the Philippines, making a living in thriving economies like Hong Kong, Singapore, and Malaysia.
For them, there’s a need that was so far not very well met. The need to send money back home, at a low cost.
Alibaba founder, Jack Ma, who is now drawn to “find ways to help people”, has just taken a step to dramatically lower the costs of remitting funds back home via its financial venture Ant Financial – using blockchain.
According to the South China Morning Post (SCMP), the move is set to be particularly helpful for “the hundreds of thousands of Filipinos working in Hong Kong”.
“These workers collectively transfer about HK$4.4 billion (US$561 million) annually to family and friends back home and, by using revolutionary blockchain technology, Ant Financial – an affiliate of Alibaba Group Holding – aims to eventually cut the cost of these remittances to near zero,” said the article.
“This comes from a promise I made a long time ago when Alipay was just launched. I have Filipino friends who asked me when they could use Alipay to send money home because it was too expensive through banks, which charge too much,” said Ma.
Alipay HK, the blockchain money remittance service on the wallet was announced this week.
Users of AlipayHK, the Hong Kong version of Ant Financial’s Alipay wallet on the Chinese mainland, will be able to transfer money within seconds to users of GCash, a mobile money service and wallet operated by Filipino telecommunications company Globe Telecom, that has about eight million users in the country.
For the first three months of the trial-period, transaction fees will be waived to encourage users to try the service.
It is currently available only for transfers between Hong Kong and the Philippines, which is the world’s third-largest remittance market.
Standard Chartered, which will act as the settlement bank for both AlipayHK and GCash for the blockchain transactions, says that the value of the remittance market was US$33 billion last year.
At present, according to the SCMP‘s survey, Hong Kong’s banks and remittance outlets charge about HKD$18 (US$2.29), and may impose other costs such as commissions or currency conversion fees on every transfer.
Ma is confident about the use of blockchain and it’s impact on the lives of people.
“The impact of blockchain to people and society will be greater than we can ever imagine,” he told the SCMP.