Ant tie-ups drive inclusive cross-border payments

In the wave of AI, financial technology innovation and industrial digital transformation are increasingly converging. At 2024 Inclusion Conference on the Bund in Shanghai last week, senior executives from leading international card schemes, banks and payment companies discussed how the fintech sector can better bridge the gaps of digitalization and what role Shanghai, as a international financial center, can play in this global transformation.

Payments for the digital economy continue to become more available to users, from individuals to small businesses, thanks to the rise of e-wallets, fast-payment systems, and in Asia, QR code-enabled transactions.

There are, however, still huge costs and barriers, especially when it comes to cross-border payments. This is doubly true for SMEs that lack bank accounts. Many SMEs still face high costs and complex dealings to move money overseas. The digital economy and the importance of e-commerce means, however, that cross-border payments are now essential, even for small businesses.

Alipay, the payments arm of Ant Group, is among the pioneers in e-commerce payments. It is one of the first widespread adopters of QR-based payments, through its Alipay ‘superapp’ that enables users to pay for a vast range of commercial services.

The fintech company – one of the most valuable fintech businesses in the world – is now pressing forward on several fronts to break down these remaining barriers.

“We don’t want anyone or any company to be left out in this digitalization journey,” said Peng Yang, CEO of Ant International and senior vice president at Ant Group said during the panel discussion at this year’s INCLUSION Conference. “For Ant, it’s about how we can democratize our technology, our innovation, and our platform.”

One announcement at the event was Alipay’s new partnership with American Express, allowing AMEX card holders to make payment in China through simple binding of their cards in Alipay.

AMEX cardholders can now access 80 million SME merchants in China, making payments more inclusive while promoting cross-border tourism.

“These are high-spending, premium global customers that are coming to China,” noted Mohammed Badi, president of Global Network Services, American Express.

For Ant, which operates Alipay for the Chinese and Alipay+ digital payment and marketing solutions to facilitate cross-border payments, this is just one more step in a broader movement towards open banking and cutting-edge technologies, including tokenization and artificial intelligence.

Yang notes that more than 70 countries are in the early stages of embracing open banking, in which customers consent to allow banks, fintechs and corporations to share their data for specific purposes. Today open banking operates within domestic markets, but the concept would be powerful if applied to cross-border needs.

Whether via open-banking or otherwise, data sharing is critical to serving SMEs, said Michael Vallance, global managing director and head of global transaction banking at HSBC’s wealth and personal banking division. “Helping SMEs access new markets and navigate bureaucracy is about bringing them the power of information and the data that we have as a bank.”

Yang also highlights the power of three evolving technologies. First are those to preserve privacy, so that businesses can collaborate without sharing raw data. Second is tech for managing risk, both leveraging AI and protecting businesses against deepfakes and other AI threats. Third is tokenization, using blockchain rails to enable cross-border payments to occur in real time, while preserving safety and security.

This sentiment was echoed by Vincent Iswara, founder and CEO of DANA Indonesia, a leading e-wallet in Southeast Asia. “This is a world where innovations are being accelerated with the use of AI, machine learning, and tokenization,” he said. Just as generative AI now makes it cheap and fast for people to build their own apps, he said, it is also breaking down the final barriers to financial inclusion.

Yang concluded that connecting this infrastructure can create a cross-border exchange network. “With this,” he said, “more SMEs, individuals, and enterprises can enjoy the benefits at a much lower cost.”

Other highlights of the 2024 INCLUSION Conference:

This article is sponsored by Ant Group.