Alibaba affiliate Ant Financial’s core business in the future will be technology services, rather than just payments, its CEO told CNBC in an exclusive interview.
Ant Financial runs one of China’s largest mobile payments platform, called Alipay, which has more than 700 million annual active users. It’s Ant Financial’s main business currently.
But the Chinese giant recently announced a new brand that will look to sell technology services to financial institutions like banks. Ant Financial has invested in a number of technologies such as blockchain, the system that underpins the cryptocurrency bitcoin. Ant is not developing a cryptocurrency but is exploring applications of the underlying technology.
Eric Jing, CEO of Ant Financial, said the company thinks of itself as a technology firm, and that Alipay was its starting point to show what could be done with tech.
“Ant Financial, from day one, we are positioned as a tech company. But previously we just wanted to make sure we are really using the tech to be innovative, to create examples, to redefine financial services that people can feel, can touch,” Jing said in an interview which aired Wednesday.
Payments accounts for more than 50 percent of Ant Financial’s revenue currently, a source familiar with the matter told CNBC. The source could not talk on the record because those financial details are private. Payments could decline as a portion of revenue.
Asked whether technology services would be the main business in the future, Jing said, “in the long term, yes,” but Alipay would be the “flagship” consumer product.
“We want to be a platform … to benefit more people,” Jing said.
Payments platforms such Alipay and WeChat Pay, which is run by rival Tencent, have faced a crackdown from Chinese authorities in recent months.
In recent years, fintech firms in China have grown largely unchecked by regulators. They moved beyond payments into selling products like micro-loans and money-market funds. But regulators concerned about possible risks to the Chinese economy have begun to put limits in place. The People’s Bank of China, for example, this month proposed rules that put in place stricter capital reserve requirements for Ant Financial and others. Those rules are expected to come into effect in the first half of 2019.
Jing said that the increased focus on technology is not related to any heightened scrutiny from Beijing. He added that regulators have played a “supporting role” for both Ant Financial and fintech in China.
There has been lots of speculation about an initial public offering (IPO) for Ant Financial, which is one of the world’s most valuable private tech firms, with a valuation of $150 billion. The Financial Times recently cited bankers in a report that an Ant Financial listing was pushed back again.
But Jing said that the company has never set a schedule for any IPO.
“We never have a timetable for that. To be honest we are more looking at what we should be focusing on … number one, developing technologies. Number two is really using technology … to benefit more people to drive financial inclusion across the world,” Jing said.
“We see a huge opportunity ahead of us … so to us, IPO in some stage is just a kind of certain development stage, it’s a natural thing, we are not positioning that as the ultimate goal. Our goal is how many users we can serve,” he added.
