Ant Financial Services Group, the world’s largest financial technology company, is the payment affiliate of Chinese e-commerce giant Alibaba Group Holding and currently dominates the online payments industry in China.
According to sources, this entity is all set to acquire U.S. money-transfer Company MoneyGram International for about $880 million in a deal that is bound to shake up the online payment landscape. The bid later was increased to $1.2 billion.
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For years MoneyGram, alongside competitor Western Union, has long dominated the money transfer industry with its large network of retail locations. It has about 350,000 outlets in retail shops, post offices and banks in nearly 200 countries and territories. However brick and mortar companies have been facing some tough competition from more tech-savvy companies that are able to offer cheaper services online.
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The combination of Ant Financial Services and MoneyGram’s large network of agents and established brand could be a game-changer for the industry by leading to more consumers, including migrant workers sending remittances home, to use online transfer services rather than taking cash to storefronts.
The acquisition is expected to close in the second half of 2017.