Powered by blockchain, a decentralized ledger and encryption technology, Ant Financial’s Hong Kong venture with conglomerate CK Hutchison Holdings can cut remittance costs significantly, said Ant Financial, which is backed by Jack Ma.
Hong Kong, home to about 200,000 Filipino workers and domestic helpers who send money home regularly, has demand for about USD 700 million of annual cross-border remittances, according to Ant Financial.
Although Ant did not discuss the fee structure for its service, the costs are expected to be lower than with conventional remittances because fewer intermediaries will be involved. The technology also allows transactions to be completed in real time with greater transparency.
The blockchain encryption technology is most often associated with Bitcoin and other crypto-currencies, but it also has broader applications as a decentralized ledger to ensure secure transactions using conventional currencies.
The US government blocked Ant from buying Dallas-based MoneyGram International earlier this year. Ant now plans to take its blockchain-enabled remittance services to more countries and regions, said Ant Financial.
Ant Financial said this month that it had raised about USD 14 billion in new capital, driving the company’s valuation above USD 151 billion.
Hong Kong users of Ant Financial’s Alipay services will now be able to send money in real time to users of GCash, a mobile money service and wallet operated by the Filipino telecommunications company Globe Telecom. Transaction fees will be waived during the initial three-month trial period, Ant Financial said.
Ant Financial’s new service works with banking giant Standard Chartered, which acts as a settlement bank for the company and GCash for the blockchain transactions. With inflows of USD 33 billion in 2017, Hong Kong-to-the Philippines is the world’s third largest remittance market, according to Standard Chartered.
Ant Financial’s Hong Kong venture said the company is also in talks with mainland regulators in hopes of bringing the new service to users who seek to transfer money between the mainland and Hong Kong.
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