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Ant Financial fights back from MoneyGram disappointment with rival blockchain remittance service

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After the disappointment of US regulators blocking its purchase of MoneyGram, Ant Financial has taken a step towards dramatically lowering the cost of remitting money overseas in a move that will, in its initial stages, help the hundreds of thousands of Filipinos working in Hong Kong, who collectively remit about HK$4.4 billion ($561 million) annually to family and friends back home.

By using blockchain technology, Ant Financial aims to eventually cut the cost of remittances to near zero, according to Alibaba co-founder Jack Ma Yun, who said he wanted to find a way to help people.

“This comes from a promise I made a long time ago when Alipay was just launched,” said Ma. “I have Filipino friends who asked me when they could use Alipay to send money home because it was too expensive through banks, which charge too much.”

The blockchain money remittance service announced Monday for its AlipayHK wallet is the first of its kind globally, according to Ant Financial. It is currently available only for transfers between Hong Kong and the Philippines, which is the world’s third-largest remittance market, with inflows of $33 billion in 2017, according to Standard Chartered, which will act as the settlement bank for both AlipayHK and GCash for the blockchain transactions.

“Hong Kong is an international financial centre in Asia, and it is most fitting that Ant Financial has chosen to kick off this pilot project right here,” said the city’s financial secretary Paul Chan Mo-po. “We take pride in Hong Kong’s robust and effective financial regulatory regime that is in line with international standards. Our financial regulators are doing their part to facilitate and foster innovations in the industry with their dedicated liaison platforms and sandboxes … allowing financial service providers to conduct pilot trials of fintech solutions in confined environments.”

Hong Kong’s banks and remittance outlets charge about HKD$18, and may impose other costs such as commissions or currency conversion fees on every transfer.

Ma, speaking at the launch event, said he wants to make it possible for people to remit even 1 cent at almost no cost, compared with the higher fees charged by traditional remittance services like MoneyGram, which Ant tried to buy last year.

“At the time we wanted to buy MoneyGram and overhaul it to help people all over the world solve this issue. Due to reasons from the US our deal with MoneyGram did not succeed, so I said, ‘Let’s make one better [than MoneyGram]’ that uses the most advanced technology,” Ma said.

posted Jun 26, 2018 by Sanjay Rawat

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Walmart like Amazon is moving itself further into traditional financial services provider territory, by expanding its money transfer operation to 200 countries

Walmart extends money transfer operation Walmart2world

Walmart extends financial services with money transfer operation

Through the new money transfer operation, people will be able to deliver money from Walmart’s nearly 5,000 US stores to locations abroad within 10 minutes.

As more consumers increasingly rely on Walmart and Amazon for their daily shopping, tie-ins to their finances are another way to keep customers on the companies’ websites and visiting their stores. Walmart first unveiled a money transfer service four years ago, allowing customers to send funds between its stores, and aiming to reach the “underbanked” — about 27% of Americans have limited access to traditional banking, according to the Federal Deposit Insurance Corporation.

Walmart claims it has saved customers $700m in fees because it charges cheaper rates.  The retailer has partnered with MoneyGram, one of the big wire transfer groups, to expand globally this month. The service will allow US residents to send money to countries such as Mexico, which received nearly $30bn in remittances last year, according to Mexico’s central bank.

Customers will pay $4 to send up to $50, $8 to send up to $1,000, and $16 to send up to $2,500. Money can be delivered to MoneyGram’s agent locations in 200 countries, or an international bank or mobile wallet account.  Walmart’s push into money transfers comes a few months after it announced it was partnering with PayActiv and Even, two financial-technology firms, to offer its 1.4m US employees tools for money management and on-demand access to their earned wages.

The moves suggest the retailer may see itself as a partner of the big financial services companies rather than a direct rival going head to head with basic products such as checking accounts or credit cards. Amazon, too, may be on a similar path: it is discussing a potential partnership to offer its customers bank accounts via JPMorgan Chase, in a deal that could unite the US’s biggest e-commerce platform with the country’s biggest bank.

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Walmart and MoneyGram International are coming together on a new international money transfer service called Walmart2World that will debut later this month at the retailer's U.S. locations, according to a press release. 

"We think sending money should cost the same regardless of where you send it; that's why we've designed a brand new global wire service to send money to 200 countries with a consistently low fee," Kirsty Ward, vice president of Walmart Services, said in a release. "There are millions of people sending money around the world to help loved ones with everyday needs or in times of emergency. Walmart2World, Powered by Moneygram helps customers get money to family and friends across the world in minutes, and the new low fees mean more of their hard-earned cash goes where it’s needed most."

Walmart said the service will have three unique aspects that are intended to make it different from competitors:

  • Unique pricing structure: Fees will remain the same no matter where the money is being sent from in the U.S.: $4 to send up to $50, $8 to send $51 to $1,000, and $16 to send $1,001 to $2,500. Walmart claims this is unlike other international transfer services that change the fee to transfer money based on where sender and/or receiver are located.
  • Highly competitive exchange rates: Walmart said it is committed to ensuring customers receive a more competitive foreign exchange rate when transferring money using Walmart2World. The new Walmart2World low fees, combined with these great exchange rates deliver incredible value for international sends.
  • Delivery within minutes to worldwide network: Walmart2World will deliver funds in 10 minutes or less, whether the receiver opts to pick up the money at any one of MoneyGram's agent locations in 200 countries, or an international bank or mobile wallet account.
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