Sep 28, 2018 (China Knowledge) - Chinese tech giants Alibaba and Tencent have launched remittance services in Hong Kong that will allow Indonesian and Filipino workers to send money home conveniently and at a lower price. The move which targets the global remittance market, that moves more than USD 600 billion annually, is part of the firms’ ambitions to make their payment services WeChatPay and AliPay global.
Southeast Asia has a growing population of 600 million people who largely lack bank accounts. According to KPMG, only 27% of those who live in Southeast Asia own bank accounts. Thus, both Tencent and Alibaba see strategic value in targeting the region.
To that end, both companies have also partnered with Hong-Kong based fintech startup EMQ which has managed to obtain regulatory approvals and bank partnerships in Southeast Asia. EMQ also has regulatory approvals in Vietnam, Cambodia, India, Singapore, China and Japan which can help both companies to enter these markets.
Filipinos and Indonesians are the majority in Hong Kong domestic worker population of 370,000. The Philippines received USD 32.8 billion in remittances last year while Indonesia received USD 9 billion in remittances and are world’s top two recipient nations for remittances. Of this amount, more than USD 16.9 billion worth of the remittances went through Hong Kong.
Currently, both WeChatPay and AliPay do not charge fees and give a better exchange rates compared to banks for remittances. This, combined with increased convenience make them attractive options for domestic workers who are looking to send money back home.
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