The financial affiliate of Jack Ma's Chinese Internet giant Alibaba Group has announced a partnership with the city of Fuzhou to build what it called a «cashless society.»
Over 20 institutions and companies, including Fuzhou Municipal Bureau of Commerce and State Grid Fujian Electric Power Company have joined Ant Financial's cashless alliance.
According to the plan, over 90 percent of stores in Fuzhou will be able to operate without cash by the end of this year, said Hang Dong, vice mayor of Fuzhou as reported by on-line publication «China Money Network.»
Going Global
Ant Financial has been increasing its penetration across Southeast Asia into Japan and is steadily carving out market share in Europe.
The firm is also closing in on a deal to acquire U.S. money transfer service «MoneyGram International» after increasing its initial $1.2 billion bid.
Targeting the «Unbanked»
Via his Ant Financial and Tencent Holdings Ma has been ramping up pressure on traditional banking services. Almost overnight, his partnerships across Southeast Asia are set to win over some of the estimated 450 million people with limited access to banking services.
Ant Financial will surely use that position to go after the lenders' core customers through other financial services.
Banks Under Pressure
China is an example of what happens when banks don't respond quickly enough to the growing threat of firms with a coherent digital offering such as Ant Financial.
Alipay and an offering from Tencent managed to snap up more than 90 percent of the country's $5.5 trillion mobile payments market between them in just four years.
