Alibaba’s (baba) payment affiliate Ant Financial, which operates the digital wallet system Alipay, is raising $2 billion to $3 billion in its bid to expand overseas, according to Reuters and The Information.
The money raised will support Alipay’s recent international deals, sources said. Two weeks ago, Ant Financial spent $880 million to add Texas-based MoneyGram (mgi) to its roster of overseas payment systems that already includes Ascend Money in Thailand and India’s Paytm.
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Importantly, the fundraising helps Alipay transition itself from a China-centric online payments system to a more formidable competitor to PayPal and others in overseas markets. Until recently, Alipay was China’s most popular online payment system for digital purchases, including ordering items on Taobao, paying for utility bills, buying movie tickets, and simply sending a few bucks to your friend. Now, it is going abroad, running alongside the overseas push Alibaba’s selling platform business has made—most recently by acquiring southeast Asia’s leading e-tailer Lazada last spring.
Alipay appears to be emulating Alibaba’s strategy in e-commerce. It’s free to merchants who use it, and only recently did it start charging consumers a nominal fee to transfer money—similar to the no-listing-fees approach used to build Alibaba’s e-commerce market share in China.