The world’s most valuable private tech unicorn isn’t WeWork, Airbnb, Juul, Palantir, or Stripe. It’s Chinese payments firm Ant Financial Services, a spinoff from Alibaba that is valued at an eye-popping $150 billion.
Ant Financial’s core product, mobile payments wallet Alipay, quietly passed the 1 billion mark in September. Alipay now has 1.2 billion distinct users, a staggering figure in any context. That’s nearly as many users as there are people in China (1.4 billion). China has the most Alipay accounts, with 900 million; another 300 million are outside of China (through local e-wallet partners) in markets like India, Indonesia, Korea, Thailand, and The Philippines.
Very few tech products in the world boast more than 1 billion users. Facebook has more than 2 billion, Tencent’s WeChat has 1 billion, but those are social platforms, where there can often be fake, bot, or duplicate accounts. Alipay requires real-name verification to pass KYC (know your customer) rules. Tencent’s Alipay competitor WeChat Pay has fewer than 1 billion users. Netflix has 160 million globally. Amazon Prime has somewhere north of 100 million.
Alipay is the most widely used fintech product on the planet. And it got that big without really leaving Asia yet.
In the U.S., Alipay has struck partnerships with merchants like Walgreens and Neiman Marcus to let Alipay customers from China pay with Alipay when they are shopping in America. Alipay also just recently opened up its app to American tourists in China, allowing them to use Alipay in China even without a Chinese bank account. (Tencent’s WeChat Pay did the same.) And Ant just this week announced a partnership with Vanguard to provide investing advisory services to Alipay customers. But Ant has not implemented a way for Americans to use Alipay in America— it hasn’t needed to.
“I’d say we’re quite busy with the markets we’re in,” says Ant Financial’s president of international business Doug Feagin, an American who left Goldman Sachs to work for Ant in Hangzhou. “We’re pursuing our globalization step by step, and we’re very pleased with what we’ve done in Asia.”
Alibaba (BABA) launched Alipay back in 2004, then created Ant Financial in 2014 to house Alipay and Yu’ebao, the world’s largest money market fund. Alibaba at that time spun off Ant but maintained a 37% pre-tax profit-sharing agreement. This year, the spinoff became truly complete when Alibaba terminated the profit-share and instead took a 33% stake in Ant.
But the highly-anticipated Ant IPO still hasn’t happened. And Feagin, in an exclusive phone interview with Yahoo Finance, says, “We don’t currently have any timeline for an IPO. We’re just focused on growing our core business.”
Feagin says Ant’s expansion relies heavily on partnerships of all sorts. Ant partners with local banks in Asian markets outside of China to allow Chinese customers to send cross-border payments; it powers the payment solutions for Alibaba-owned ecommerce sites like Lazada in Southeast Asia, Daraz in Pakistan, and Trendyol in Turkey; and it partners with a range of businesses in China to offer blockchain-based remittances.
Yes, blockchain. Chinese president Xi Jinping declared in October he wants Chinese companies to embrace blockchain tech, and Ant has been using blockchain since 2016. Last month, it launched the Ant Blockchain Open Alliance, a blockchain consortium.
As an example of how Ant is using blockchain, Feagin offers Huashan Hospital in Shanghai: “We enable them to put prescriptions on blockchain and share them with a patient. The patient can then go get the prescription and coordinate with the vendor. So blockchain takes something that was paper-based and took many hours and pain and makes it something incredibly easy, safe, and convenient for all the parties: the hospital, the insurer, the patient, the pharmacy.”
Feagin even appears to take a shot at the many financial institutions around the world that have announced some sort of blockchain pilot program, but often with little real activity behind it. “You read a lot about blockchain as an idea in development in many places,” he says. “Here, it’s actually being implemented in real uses. In the China market, there is a lot of energy around it.”