China's Ant Group doubles down on global expansion with cross-border payments offering Alipay+

• Ant Group is looking to expand into the payments markets of Europe, Middle East and Latin America with its Alipay+ offering.
• "What we found is that people want to use their home e-wallets when they travel abroad. So they don't want to have to load their card into another app that they don't know as well," Douglas Feagin, senior vice president of Ant Group, told CNBC.
• Ant introduced Alipay+ in 2020, allowing foreigners to use apps from their home countries to make payments in China by scanning QR codes of Alipay – Ant Group's largely domestically-focused platform – and in other countries via local partners.

Chinese fintech major Ant Group is looking to boost its global presence via its digital offering, Alipay+, as it seeks to connect mobile payment apps around the world.

"What we found is that people want to use their home e-wallets when they travel abroad. So they don't want to have to load their card into another app that they don't know as well," Douglas Feagin, senior vice president of Ant Group, an affiliate of Chinese tech giant Alibaba, told CNBC.

The group's global arm, Ant International, introduced Alipay+ in 2020, allowing foreigners to use apps from their home countries to make payments in China by scanning QR codes of Alipay – Ant Group's largely domestically-focused platform – and in other countries via local partners.

"We see a huge opportunity for expansion and the relatively broad coverage we have in Asia – we [would] like to replicate in places like Middle East, Latam and Europe," said Feagin. "People from all these regions are going to other regions, so a big opportunity to expand."

Ant had invested in country-specific e-wallets across Asia, but the CEOs wanted to take their products overseas, said Feagin, also president of Ant International.

The company had some cross-border tourism business from customers traveling outside of China, said Feagin, but that was "mostly focused on where the Chinese tourists go." Ant had entered Europe and the U.S., where Chinese tourism was booming before the Covid-19 pandemic, through Alipay.

Ant with its Alipay+ offering seeks to make the most of the early inroads into those markets.

"We had the benefit that Alipay was already accepted in many merchants around the world so one of our first steps was [to] convert those merchants to Alipay+ merchants. So instead of just accepting a wallet, they can accept many wallets," said Feagin.

Alipay+ now connects 88 million merchants in 57 countries and regions to 1.5 billion consumer accounts across more than 25 e-wallets and bank apps, according to Ant.

Growth markets

As part of its overseas business expansion, Ant bought stakes in several companies such as Singapore payments firm 2C2P in 2022 and South Korea's Kakao Pay in 2017.

Ant also partnered with national digital payments services such as Singapore's SGQR, Malaysia's DuitNow QR and South Korea's ZeroPay last year.

"Ant Group's early vision for global expansion was centered on Southeast Asia. The company took strategic stakes in e-wallets in every major Southeast Asian economy," Zennon Kapron, founder and director of consultancy Kapronasia, said in a January report.

Ant is also expanding into emerging markets such as Sri Lanka as well as Cambodia. The firm has also expanded into Europe and Middle East, partnering with European e-wallets Tinaba in July last year and Nexi in February as well as Dubai Duty Free in the Middle East at the start of this year.

There are also growth opportunities in the firm's established markets like Singapore and South Korea, for instance a lot of people use mobile payments in China, but still far fewer compared with people in other countries, said Feagin.

"There's huge room to grow. I think a lot of people just think of using traditional payment methods when they go abroad."

"When you think about the big markets that receive a lot of tourists, like Thailand and Japan, the chances for payment from mobile apps to grow are enormous."

From problems to solutions

Ant Group's future in China became uncertain when regulators pulled the plug on its initial public offering in November 2020.

Ant was also forced to restructure to become a financial holding company regulated by the central bank.

"Following restructuring mandated by China's regulators that occurred concurrently with various geopolitical tensions that impacted its ability to expand in certain markets, Ant modified its global expansion strategy. The result was Alipay+ which aims to resolve interoperability hiccups for e-wallets," said Kapron.

The firm first targeted countries with large populations to rapidly expand its user base, said Feagin. It also looked at key tourism destinations such as Japan, Thailand and Singapore.

"These are big markets for people wanting to come and visit and so we focused a lot on building out their merchant coverage there," said Feagin.

And now it doubling down on its global expansion, with its eye on the European, Latin American and Middle East markets.

– CNBC's Evelyn Cheng contributed to this report.