Ant Group curbs support for overseas partners in strategy rethink ahead of listing

Chinas Ant Group Co Ltd has been cutting funding and staff support to many of the overseas e-wallet firms it has invested in as it pivots away from earlier ambitions of becoming a global payments leader.

The shift in strategy by the Alibaba-backed fintech giant came late in 2019, brought on by a change at the helm and a reworking of priorities as it planned for its IPO and grappled with regulatory challenges at home.

It has made large cuts to the hundreds of millions of dollars it spent each year to subsidise user growth at overseas e-wallet firms offering digital payment and other financial services, and is repatriating Ant staffers, according to more than a dozen executives who work or have worked with Ant in nine countries.

This year, Ant also quietly halted an ambitious plan to create a global payments infrastructure based on a common QR code system connecting all the e-wallets it has invested in, despite efforts to make it a reality throughout 2019, the sources said.

The network would have enabled the e-wallets to be used outside their local markets in other countries covered by Ants partners, they said. It would have also likely made Ant, best known for its Alipay service that serves mainly Chinese customers, a global payments leader.

Ant said in a statement it “has always been and continues to be committed to working with global partners, including e-wallet operators, to make financial services more inclusive for consumers and small businesses.”

The Chinese firm has invested in more than a dozen fintech companies with e-wallet services, which allow consumers to store funds and make digital payments even without a bank account, beginning with a $500 million-plus stake in Indias Paytm in 2015. Most are in Asia and include Mynt in the Philippines, DANA in Indonesia, and EasyPaisa in Pakistan.

To be sure, Ant is continuing to invest overseas. According to the prospectus for its dual Hong Kong and Shanghai listing that is set to raise at least $34.4 billion (26.4 billion pounds), Ant has earmarked a tenth of the proceeds for cross-border expansion.