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Alipay and that IPO

Alipay's parent Ant Group was all set to go public raising $37bn in what would have been the world's largest IPO before Beijing’s intervention late last year. There has since been much musing about what this says about China and being an entrepreneur there – but a lot less about what it says about payments.


Putting to one side (what we two frankly don't know about) Chinese politics, which may well have a big bearing on Beijing's move, let's just focus on payments. Alipay is Big, Very Big in payments. What is more, Alipay's payments business fuels Ant's lending and savings businesses in gloriously self-nourishing circularity ... the sort of circularity that has hitherto not been seen outside the strictures of, er, banking.


Alipay rose to its position quickly, and (almost) without regulatory restrictions, bringing generations of payers and payees out of largely cash-based payments into the brave new world of app-payments, QR codes and more. Its rise is almost unthinkable in more developed markets where legacy systems and products prevail. But its meteoric rise and Beijing's apparent misgivings about it enjoying an even more stellar future, do signal a thing or two about what the folks in charge think about private sector dominance in payments.


Central banks look after money as we know it. In that role they tend to like to oversee our payments systems, ensuring that they work. Together with other authorities, they also usually like to make sure we have choice and that we aren't exposed to harm or overcharged for paying. There are quite a few ingredients that go into making sure that modern payments systems work, many of which are outside the control of any individual central bank. But the larger payment systems in any given country are, by definition, something a central bank will want to keep an eye on. Alipay and Ant's seemingly inexorable rise is – or was – perhaps just too much to countenance (at least at the long arm's length that IPO promised (or presaged).


Fly too close to the sun and, as BTC buyers might usefully remember at this heady point, you might just get burnt.


#Alipay #AntGroup #IPO #payments #fintech #bigtech #banking #money #crypto #centralbanks

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