Ant Group cuts funding, staff support to overseas e-wallet firms, sources say

The Alibaba-backed fintech giant has made large cuts in the money it spends each year to subsidize user growth at digital payment and e-wallet companies it has invested in overseas. In addition, it has been calling back Ant staffers, more than a dozen executives who work and  have worked with the company in nine countries told Reuters.

The reasons for this shift in strategy, which began in late 2019, was due to the new leadership (Simon Hu replaced Eric Jing as CEO), a reworking of priorities due its IPO listing planned for this year, and the regulatory hurdles it’s facing in China.

Besides this, Ant is also coming up against intense competition from Tencent’s WeChat Pay and super app operator Meituan within the country.

Ant Group is said to have also halted its plans to create a global payments infrastructure based on a common QR code system that connects all the e-wallet players it has invested in, as per the sources in the report.

This plan would have enabled e-wallets to be used outside their local markets in countries that Ant Group’s partners operate in and would have effectively made the company a global payments leader.

In a statement to Reuters, Ant Group said that 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.

Over the years, Ant Group has invested in several fintech companies with e-wallet services such as Paytm in India, Mynt in the Philippines, Dana in Indonesia, and EasyPaisa in Pakistan.

Ant Group is expected to raise US$34.5 billion through its dual IPO listing in the Hong Kong and Shanghai exchanges, making it the world’s largest IPO.

See also: Is Ant Group a real threat to Western payment duopoly Visa, Mastercard?

However, in the company’s prospectus for the listing, it has earmarked a tenth of the proceeds for cross-border expansion.

In May, Ant said it was investing US$73.5 million in Myanmar e-wallet firm Wave Money. It has also applied for a digital wholesale banking license in Singapore.

Sources told Reuters, however, that further aggressive investments in overseas e-wallet firms are unlikely.

Correction (October 29, 5:15pm Singapore time): This article originally said that more than a dozen employees in nine countries had told Reuters the news. It is over a dozen executives who work and have worked with the firm. The article also mentioned a change in the leadership (Simon Hu replaced Eric Jing as CEO). It is a new leadership as Eric Jing remains as executive chairman of Ant Group.