Ant Financial, the financial services arm of Alibaba Group formerly known as AliPay, is about to launch a blockchain-based cross-border remittance service developed in-house. The first phase of the service will power international payments between Hong Kong and the Philippines through a partnership between AlipayHK and GCash.AliPay’s partner banking institution Standard Chartered will act as the settlement bank. Three parties will oversee the transaction and act in parallel over a shared ledger.
Jennifer Tan, Chief Executive Officer of Alipay Payment Services (HK), said the cross-border remittance service will provide real-time money transfers at a competitive exchange rate with much lower transaction fees. These fees will be further waived during an initial three-month trial period.
“What used to be a long process of physically going to a remittance booth, queuing in line for hours and filling out forms, is now easily and securely done over the mobile phone in just a few seconds”, said Tan.
Jack Ma, CEO and co-founder of Alibaba Group, aims to completely disrupt international payments services by allowed 1 cent transfers at almost no cost.
“At the time we wanted to [buy] MoneyGram and overhaul it to help people all over the world solve this issue,” he said. “Due to reasons from the US our deal with MoneyGram did not succeed, so I said, ‘Let’s make one better [than MoneyGram]’ that uses the most advanced technology”, Jack Ma commented.
Ma, a Chinese business magnate with a net worth of $42 billion, according to Forbes, also explained how different is distributed ledger technology, which is capable of completely disrupt our societies, to Bitcoin, which he considers to potentially be a speculative bubble.
“Blockchain technology could change our world more than people imagine. Bitcoin, however, could be a bubble […] “Traditional financial institutions serve 20 percent of people and make 80 percent of profits. New financial institutions should service 80 percent of people, and make 20 percent of profit.”
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