This is behind Alipay, one of the most important financial apps in the world

The Alipay app offers a whole range of services.
Ng Han Guan / AP

At the beginning of November, all eyes were on the Chinese fintech company Ant Group, which was preparing for the world’s largest IPO – until it was abruptly stopped.

According to a report in the “Wall Street Journal”, China’s President Xi Jinping had direct influence on the IPO being stopped. This is seen as a major sign of the government’s ability to disrupt the plans of even one of the country’s largest private companies. Beijing has since directed Ant to revamp its business and “go back to its origins”.

Aside from his IPO debacle, Ant is still a big hit – and that owes much to his crown jewel: an app called Alipay.

More than a billion Chinese use Alipay

Alipay was originally the payment service for Alibaba, the e-commerce giant founded by Jack Ma, a kind of Chinese Amazon. Alipay was later spun off and has developed into an independent provider.

In China, Alipay is a giant. More than a billion Chinese people use the company’s services, making Ant a heavyweight in the Chinese financial system and “vital to consumers every day,” Matthew Schopfer, director of research at investment firm Infusive Asset Management, told

“It’s like imagining a combination of some of the most popular American apps, all seamlessly strung together but connected to finance,” said Eric Schiffer, CEO of private equity firm The Patriarch Organization

Alipay offers a payment feature that can be used to send money to people and a PayPal-like service for online payments. The app can be used to save money in a checking account, buy and manage insurance, get financing, get a credit card and even call a taxi. The app can also be used to pay bills in restaurants and many other shops by simply scanning a QR code. The function makes Alipay ubiquitous in China.

alipay app china ant
Alipay (blue) is ubiquitous in everyday life in China, alongside competitor Wechat Pay (green).
HECTOR RETAMAL / AFP via Getty Images

This means that all essential financial services from adolescence to retirement can be managed with a single app. Parents can use the app to give their children pocket money, later they will receive their first credit card, can buy a car and choose car insurance. Everything can be handled through a single app.

Most recently, Alipay entered into collaborations with European fintechs

Hundreds of millions of Chinese don’t use what a traditional financial services company thinks of, or don’t even have a credit card. The Ant Group has more than accommodated them.

The online financial world as it currently exists can “be a totally fragmented universe,” said Blair Silverberg, CEO and co-founder of financial services company Capital. “And if it were all in one place, like the button on your phone, that’s roughly what Ant Financial created.”

Alipay is also making it easier for more people to get a loan thanks to its algorithm that can qualify people who normally wouldn’t qualify based on a traditional creditworthiness risk profile, Schiffer explained. And consumers will be drawn to services that provide them with financial opportunities more easily without having to overcome numerous hurdles.

“The intelligent fintechs of the future, and Ant is one of them, will be proactive when it comes to not only democratizing credit profiles, but also offering financing options,” said Schiffer.

So far, Alipay was little known in Europe. But recently the Chinese company has been entering into more and more collaborations with European fintechs such as Klarna or Transferwise.

Ant’s IPO plans remain unclear

The Wall Street Journal reported that the Ant Group had always intended to leave the New York Stock Exchange out and only apply for an IPO in Shanghai and Hong Kong. But relations between the US and China have become increasingly strained in recent months, a fact that, according to Schiffer, probably played a role in Ant’s decision.

“I think they wanted to be careful not to make themselves the enemy of regulators by flaunting the massive increase on US soil,” said Schiffer.

But the way Ant’s stock market plans look now, they probably won’t resume in China for a while. And even if they do, Ant likely won’t go public as the fintech disruptor it was predicted to be. Instead, the company is likely to use more conservative banking methods to meet China’s new microcredit regulations.

“Pure fintech is out of the way – it’s dead and buried,” said Schiffer.

This article has been translated from English and edited. You can find the original version here.


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