The Chinese electronic payments industry is the most advanced in the world. It presents a challenge not just to western financial institutions, but to policymakers and regulators worldwide. These truths were understood already. Ant Financial’s recently closed $10bn fundraising, which pegged the value of the Chinese financial conglomerate at $150bn, merely puts a number to them.
To put that number in context, it is greater than the market capitalisation of Goldman Sachs, American Express, or BlackRock — all of which are under $100bn. Whether Ant’s valuation will, in a few years time, appear to be cheap or starry-eyed is open to debate. But its staggering scale — achieved behind its core payments product, Alipay — is undeniable.
Alipay claims 500m active users, and, along with its rival Tencent, controls almost all of the Chinese $16tn mobile payments market. The technology’s ease of use has made it ubiquitous. Phone-scannable QR codes mean that merchants do not need payment hardware such as card or chip readers. For young people in Chinese cities, cash rarely figures in everyday transactions.