Inbound remittance data from the World Bank revealed that five of the top 10 recipient countries in 2017 are from Asia with India and China topping the list at 11.2% and 10.4% percent respectively. Southeast Asia’s the Philippines, Pakistan and Vietnam are also in the top 10 global list of inbound remittance volume at US$32.8 billion, US$19.7 billion and US$13.8 billion respectively.
Daito Nippon Brokerage has noted that both companies have recently developed and launched their own money transfer platform that is based in Hong Kong. Individuals and companies based from the Philippines or Indonesia will be able to use the platform to send money overseas instantly.
This is Alibaba and Tencent's first big move to tap into a global remittance market estimated at over US$600 billion around the global on an annual basis.
"Both Alibaba and Tencent are working with a Fintech Hong Kong start-up company called EMO, the company has regulatory approvals and partnerships in place with many banks across Southeast Asia," commented Richard Taisho who is the Head of Equity Research at Daito Nippon Brokerage.
Both Alibaba and Tencent will face the current competition in the remittance market including new smaller technology-based start-up companies that will focus on mobile payments.
Established in 1998, Moneygram International already provides a strong global presence when it comes to global payments. The company already operates in over 200 countries and has expressed interest in new tech developments.
"Investors looking to gain from future developments in Alibaba and Tencent should always remember that both companies have a lot of capital at their disposal." said Spencer Wright, Head of Corporate Trading at Daito Nippon Brokerage.
Researchers at Daito Nippon Brokerage have noted that by the end of this year Global remittance market will reach just shy of US$500 billion.
In this early stage Alibaba's 'Alipay' said that their first focus was its Chinese customer, moving along it expanded into merchant accounts and is now looking to provide local wallets with easy access.
First published in FInTech Innovation