A few days after Huawei‘s CEO, Ren Zhengfei, called on the creation of a Chinese version to rival Facebook’s Libra cryptocurrency, Alipay has received a license for its Hong Kong version called AlipayHK to operate across the country.
According to Ren:
“Even China is able to issue such currencies, why wait for Libra? The strength of a state is greater than that of an internet company.”
AlipayHK expands its territories
With the licensing of AlipayHK, the mobile money platform will be available in Hong Kong, Macau, Guangdong, and beyond. Notably, the payment service will have additional features such as facilitating blockchain-based cross-border remittances, stamp printing, and purchase of insurance.
AlipayHK has been in operation since 2017 and currently has a user base of more than two million users. Additionally, the Hong Kong version is supported by over 50 thousand merchants. However, the cross-border remittance service was added in mid-2018. The service initially supported remittances to the Philippines.
AlipayHK and Facebook Libra have similarities but the former is better
AlipayHK and Facebook Libra have a common goal; to ease cross-border payments and to bank the unbanked. Interestingly, although the goal is the same, the path followed by the two firms is different.
For example, Facebook has employed the use of a stable coin pegged to a variety of fiat currencies. AlipayHK, on the other hand, has made use of an electronic wallet that is recognized by international financial institutions in different countries.
Luckily, AlipayHK is a few steps ahead of Facebook Libra. For instance, Libra has no solid launch date and is haunted by regulatory concerns from the United States, among other countries across the globe. AlipayHK’s cross-border payment service that uses blockchain technology is already in use and relatively recognized.
According to Chainnews, a media outlet:
“AlipayHK is operated by a joint venture between Cheung Kong Hutchison Industrial and Ant Financial. AlipayHK, Alipay Hong Kong e-wallet, was launched in May 2017 and operated by Alipay Financial Services (HK) Limited (APSHK) and regulated by the Hong Kong Monetary Authority. APSHK is a joint venture between Changjiang Hutchison Industrial Co., Ltd., a large multinational company with operations in more than 50 countries, and the world’s top financial technology group and Alipay Financial Services Group.”
AlipayHK has a 53 percent market share
Notably, AlipayHK’s usage in Hong Kong covers restaurants, large chain stores, pharmacies, convenience stores, minibusses, and supermarkets. According to an independent survey conducted in Hong Kong, mobile payment users have an average of 3 electronic wallets (e-wallets) each. The AlipayHK e-wallet has a market share of 53 percent.
At the beginning of March, AlipayHK launched a cross-border payment network that enabled its users to directly connect with merchants in Macau, Hong Kong, and Dawan district “without prior exchange.” 21 days later, it received the National General License enabling the service to be rolled out throughout the country.
Towards the end of June, AlipayHK launched a blockchain-based remittance service to connect with the international market. The service was a collaboration between Standard Chartered Bank in Hong Kong and Singapore, AlipayHK, and Gcash, Philippines leading e-wallet. With Hong Kong’s approach to dilute the presence of Facebook Libra, the layout of AlipayHK as a cross-border payment service will dwarf Facebook Libra’s share of the remittance market when and if it’s launched.
Interestingly, with the growing trade wars between China and the United States, Alipays options have been revamped with more features and they are the perfect revenge against Libra and Donald Trump?