Alibaba’s Alipay is the world’s largest mobile and online payment platform which comprises 520 million users. After launching Alipay in South Africa in July 2018, Alibaba has announced plans to further expand its presence in the region.
Alibaba could help enhance financial inclusion…
A partnership between the United Nations Economic Commission for Africa, the International Financial Corporation and Alipay’s parent company Ant Financial was formed in August 2018. The reason being, to “enhance financial inclusion…through investment and technical capacity building”.
…but may threaten African financial technology startups
According to Eric Jing, Ant’s CEO, the partnership could also help Alipay replicate its success in Africa. This is because Ant Financial could take advantage of the African Continental Free Trade Area agreement. Ant may then choose to acquire already established online and mobile payment platforms to expand its reach. This move could threaten African fintech companies.
Ecommerce is continuing to grow quickly in Africa and Alibaba is looking to take advantage of this. Alibaba’s general strategy shows how it could ultimately shape the financial technology landscape in Africa.
In China, Alipay prevents the seller from accessing payment until the buyer confirms delivery and condition of goods purchased. African ecommerce companies, Jumia and Konga, pay sellers seven days after goods have been delivered. Other may be influenced by the Alipay model and initiate its efficient processes. Or, some may choose to form a partnership with Ant. The Alipay payment solution could therefore become integrated into ecommerce in Africa.
Sign-up here to receive our free newsletter that will keep you up-to-date about the latest news and developments from Alibaba.