Today Ant Financial, the Alipay operator, launched a blockchain remittance app to transfer money from Honk Kong to the Phillipines.
The deal is between AlipayHK and GCash, the Philippines-based mobile wallet company. Roughly 10 million Philippinos work abroad and according to the World Bank they remit $33bn a year. That makes the Philippines the third largest country for remittances behind India ($65bn) and China ($63bn).
Standard Chartered is acting as the settlement bank.
The new Alipay service aims to provide 24 hour real-time remittances at competitive exchange rates with low transaction costs. The smart contract on the blockchain notifies all participants at the same time and hence enables customers to track payments. However, all details are encrypted so that only the relevant people get to see them.
According to South China Morning Post, a normal remittance like this from Hong Kong would cost a minimum of HK$ 18 plus additional fees.
Failed MoneyGram bid
Ant Financial attempted to acquire US remittance company MoneyGram but the bid was blocked in January by a government committee. One of the reasons for the rejection was a concern about the privacy of US service personnel remittances.
Jack Ma is the founder of Alibaba which is affiliated with Ant Financial. At today’s launch event he spoke about the desire to enable micropayments with tiny costs.
“At the time we wanted to [buy] MoneyGram and overhaul it to help people all over the world solve this issue. Due to reasons from the US, our deal with MoneyGram did not succeed, so I said, ‘Let’s make one better’ that uses the most advanced technology.”
Jennifer Tan, CEO of Alipay Payment Services (HK) commented: “What used to be a long process of physically going to a remittance booth, queuing in line for hours and filling out forms, is now easily and securely done over the mobile phone in just a few seconds.