Fintech giant Ant Group, back in Beijing’s good graces, uses Alipay+ to burnish Hangzhou’s tech image for Asian Games

The fintech affiliate of Alibaba is expanding support to several Asian e-wallets through its Alipay+ service to smooth travel to its home city
After its IPO was quashed in 2020, Ant is now a central pillar in the government’s effort to rally Big Tech to help the economy’s post-Covid recovery

Ant Group

Tracy Quin Hangzhou

Published: 7:00am, 23 Aug 2023

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Ant Group, which was forced to pull its US$40 billion initial public offering at the last minute in 2020, is regaining the government’s favour as its payment service Alipay is promoted as a key element to a successful Asian Games, the biggest public relations event for the city of Hangzhou this year.

In the downtown centre of the capital city of eastern Zhejiang province, where Jack Ma started Alibaba Group Holding and later its spin-off Ant, nearly all stores now prominently display their digital payment codes, promoting Hangzhou as a cashless society. Alibaba owns the South China Morning Post.

In addition to the usual codes for Alipay and WeChat Pay, from rival Tencent Holdings, which are ubiquitous across China, an increasing number of stores in Hangzhou include signs in English reading, “pay with your home e-wallet”, with the logos of other Asian digital wallet services displayed on the sign. This is part of Ant’s efforts to improve the experience for foreigners travelling in the city, particularly for the Asian Games, which were postponed from last year and run from September 23 to October 8.

“I put this notice on the wall one or two months ago after [Ant employees] came to the store and introduced this to me,” said Wu Linfeng, a 64-year-old who runs a street stall selling local Hangzhou food on Zhongshan South Road in the city centre. “Foreign visitors can just scan and pay.”

Ant Group’s Alipay widens support for Visa, Mastercard, other major credit cards

Ant has worked with other companies to make its quick-response (QR) codes compatible with a number of different digital wallets, meaning many visitors from around Asia can use whatever apps they already have on their phones to pay for goods. Merchants do not need to change anything, according to Alipay+, the global cross-border digital payments and marketing solution from Ant, which facilitates the payments and converts the currencies from overseas wallets.

The success of Alipay and WeChat Pay has made China a global model for the shift to mobile payments as cash has all but disappeared from many shops and street stalls in recent years. However, this has made it difficult for many visitors to China who do not have access to local digital wallets loaded up with yuan. In another bid to help remove this barrier, Alipay has recently expanded support for foreign credit cards.

Beijing once hailed China’s Big Tech firms like Alibaba and Tencent as part of a long tradition of innovation in the country that includes inventions like gunpowder and the compass. However, an abrupt shift in policy three years ago cast a pall over the tech industry.

In 2020, Chinese authorities sought to curb the influence of internet platforms in the name of reining in the “irrational expansion of capital”, wiping trillions of dollars in value from tech stocks. The crackdown kicked off when Beijing scuttled Ant’s highly anticipated IPO that year following a controversial speech from Ma weeks earlier. Ant was later told to follow the same regulatory rules as conventional banks, putting limits on how big it could scale.

The crackdown eased at the end of 2022 as Beijing again shifted its attention to economic growth, hoping Big Tech could help the country recover from strict zero-Covid policies that had curbed a lot of commercial activity.

Ant’s Alipay+ service now works with multiple major e-wallets from around Asia, and signs in Hangzhou have been promoting this with the logos of supported services. Photo: SCMP/ Tracy Qu

In January this year, Ant overhauled its shareholding structure, diluting the voting power of founder Ma to make China’s largest fintech company more “transparent and diversified”. Last month, the financial regulators fined the fintech giant a total of 7.1 billion yuan (US$984.3 million) for breaking rules related to “corporate governance and financial consumer protection”.

Ant’s latest efforts in Hangzhou are illustrative of how tech giants are starting to spread their wings again. Wu, the merchant, said Ant employees had stopped by her stall at least two or three times to promote Alipay+.

Ant is also competing with its Shenzhen-based rival. Tencent’s WeChat now allows users in Hong Kong and Malaysia to set up local wallets using their own currencies. Like Alipay, WeChat Pay has also expanded support for international debit cards and credit cards from Visa, Mastercard and others.

The connection between Ant and Hangzhou runs deep. In May, the fintech firm and the municipal government signed a wide-ranging collaboration that is expected to speed up the city’s digital transformation.

The Asian Games marks one of the most important events for the Hangzhou government in recent years. The city, which had just three subway lines when it won its bid in 2015 to host the games, now has 12 lines running throughout the city.

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Fu Lu, director of cross-border business in Greater China at Ant’s International Business Group, said the company’s support for the games comes mainly through facilitating services and payments. “Now that we already have supported local wallets from Malaysia, South Korea and Hong Kong, under instruction and support from the central bank, we are aiming to support 10 digital wallets before the Asian Games kick off,” Fu said in an interview last week.

Visitors coming from a country that does not have an e-wallet connected through Alipay+ can download the mainland Alipay app and connect their home bank cards to the app, Fu added.

In addition to expanding payment options, some shops see the Ant’s new services as helping them modernise in other ways. Florasis, a beauty brand known for its cosmetics, set up the Alipay+ service for its flagship store near West Lake.

“For us, the set-up cost is very low,” said Kun Ni, the head of branding at Florasis. “It’s also a good tool for us to do cross-border marketing. For example, sales information can be sent through the app.”

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