Jack Ma's Ant Group set for record $34B market debut

https://www.bbc.co.uk/news/business-54692537

by headalgorithm • 6 years ago

206 212 6 years ago

bbc.co.uk

eunos2• 6 years ago

From what I read and watched about Alipay, seems very convenient.

Too bad it won't be available to non-Chinese users anytime soon.

Tepix2• 6 years ago

If you pay on AliExpress today you are using AliPay.

bufferoverflow• 6 years ago

"using" only in the sense that your website visitors use Google Analytics.

gruez11• 6 years ago

But it's still processed via the visa/mastercard network. It's "alipay" in the same sense that the recent magnetic accessories for the iPhone 12 is "magsafe". Totally different things, same branding.

ButWhatFor2• 6 years ago

I think I’ve seen someone pay with AliPay using their face... pretty far ahead of what we have...

gruez11• 6 years ago

pretty far ahead of what we have...

call me a luddite but that's one innovation that I can do without.

netsharc• 6 years ago

I was in an airport in China. A screen said "Walk up to the camera and we'll tell you which way to your gate.". I did so, the screen highlighted my face on the camera feed, showed me my name and my gate. Geezus Christ, they don't hide the fact that they're tracking faces...

When you first enter China, you have to let a machine scan your face (IIRC fingerprints too?), and locals have to scan their (RFID-enabled) IDs to enter airports or train stations; so they seem to really have total control.

garmaine• 6 years ago

How is a face authorization? Can I just point my phone at you and take your money?

woutr_be2• 6 years ago

I use it in Hong Kong, it's very convenient to pay utility bills with. Some merchants also accept it for online payments, and you can pay with it at convenient stores, although Octopus card is far easier there.

FeloniousHam• 6 years ago

As an American ignorant of Alipay/WeChat, I don't understand why they are perceived to be more convenient/advanced than the credit card system here. I tap my phone/card to pay at the register, enter the card number once for utilities in a webpage, that pretty low friction.

_-___________-_4• 6 years ago

I'm not Chinese and I use Alipay all the time :)

spcebar• 6 years ago

Don't know if it's nationwide, but at CVSs in Boston you can now use alipay.

_1tan• 6 years ago

AliPay can be used at the German drug store chain "DM" as well.

QuietZelda• 6 years ago

You can use Alipay Tour Pass in China

arusahni• 6 years ago

I always wondered what org was behind the Ant Design React UI framework.

cfontes• 6 years ago

I also did, Ant Design is pretty good, I was sure it was some major company but that explains it...

radihuq• 6 years ago

My first thought as well

Cthulhu_2• 6 years ago

I started with it in a new project once, but wasn't allowed to use it because of its Chinese origins, :/

bbaumgar• 6 years ago

We are in the process of transitioning off it because of those same Chinese origins... probably justified but it's a painful process.

scaladev2• 6 years ago

Jesus Christ. This is the Red Scare all over again.

scaladev2• 6 years ago

I wrote a comment pointing out the lunacy of this situation, and it got flagged almost immediately. Do you also refuse to use the Linux kernel? It's got plenty of that dirty Chinese code these days. I see @huawei.com and others on LKML all the time.

The history repeats itself endlessly.

nogabebop233• 6 years ago

I evaluated it for our company a few years ago (the entire Ant design system, not just React UI Components) and although everyone had heard of Alibaba few knew about Ant Financial (now the Ant Group) even though it's absolutely massive.

Funny how our 2 leading candidates, AntDesign and BluePrint, both come from less than "ideal" companies with similar baggage, though from opposite sides of the spectrum!

wombatmobile4• 6 years ago

In this interview with Stephen A. Orlins, Kai-Fu Lee explains the value proposition of Alipay

https://www.ncuscr.org/media/podcast/uschinainsights/kai-fu-...

Orlins: You focus a lot on, kind of Alipay or WeChat Pay. How does that change the landscape for AI in China versus the United States, where we still are heavily reliant on a credit card system that seems quite old and outdated when you're in China?

Lee: It's a very unique opportunity for China to leapfrog. The U.S. had the world's most leading transaction tool, which was the credit card, but it became outdated. It charges too much, it's inconvenient, it's only customer to merchant. In China, with WeChat and Alipay, anybody can pay anybody. We can do micro payments and there are no fees, almost no fees, so the 2% extra charge is almost like a tax on the American economy charged by the credit cards. But with respect to AI, now everybody, including WeChat and Alibaba, but also, if you build an app, you know who your customers are, and what they paid and why. And if you're a retail shop and people scanned you, you know who pays you and why. There are even beggars in the street holding up a sign, "Scan me and give me money," and they know who paid them and why. So I think this is creating a huge amount of data that will help AI.

gruez11• 6 years ago

It charges too much, [...] so the 2% extra charge is almost like a tax on the American economy charged by the credit cards.

they seem to have forgotten about europe where they have the same credit card networks, but capped interchange fees to around 0.3%.

[...] So I think this is creating a huge amount of data that will help AI.

This already happens to an extent in the US. Your credit card transactions are sold to data brokers for analytics/market research purposes.

wombatmobile4• 6 years ago

This already happens to an extent in the US. Your credit card transactions are sold to data brokers for analytics/market research purposes.

To an extent. US cc transaction data are batched. Alipay provides more agile context by integrating location data real time.

abstractbarista• 6 years ago

The merchant fee sucks for poor people because businesses likely raise margins to cover it (if they see significant volume via credit cards, like grocery stores).

Every transaction I make nets me 2-5% 'cashback'. Great for me since I get 5% back even on things like my electric bill and Internet.

But for everyone else paying cash at places where credit is primarily received, they're basically being fined for my benefit.

mchusma• 6 years ago

The 2% tax is IMO the easiest problem to see and fix in the american financial system.

cooliosis• 6 years ago

I think it's because the question asked about US vs China

wil4213• 6 years ago

Why would I want to give up my various credit/debit cards and use a single app? I would be giving a single app all the payment power. This works well in a highly regulated Government controlled market. The EU and US allow anyone to compete. China does not.

A better and more realistic solution in the US is the personal bank to bank transfers people can easily do in the UK/EU.

dmurray2• 6 years ago

There are two major credit card networks and essentially 0 new entrants in that space. Your "various credit/debit cards" are most likely with the same two networks, linked to different bank accounts, just as they could be with Alipay. They just have different branding.

Two is a lot more than one, for competition purposes, but it's hardly a wide open market where "anyone can compete", and it's the same as the number of major consumer payment networks in China (Alipay and Wechat pay).

markus_zhang• 6 years ago

Because it's a lot more convenient, for the customer to just carry their cell and scan a QR code to pay, and a lot more convenient and cheaper for a small seller to just print a paper showing a QR code. Yeah for sure there are security issues (e.g. thieves changing the QR code pic so the money goes into another account) but most people out there put more value in that convenience. Plus they are a lot cheaper than cc.

Personal bank to bank transactions, at least in Canada, still involves a lot of trouble.

piokoch• 6 years ago

I am not sure if I share Mr. Lee's enthusiasm about this massive spending control in the hands of a single company and the government that routinely puts people in concentration camps. Also helping some AI is also not on my list of life priorities, delicately speaking.

hesarenu• 6 years ago

So similar to India's UPI?

dicomdan• 6 years ago

You can send money for free P2P with a myriad of services in the US. Credit cards serve a different purpose.

nine_k4• 6 years ago

The fun thing is that you have a number of ways to pay electronically in the US, PayPal and Venmo are pretty widespread.

What is missing is an effortless way of asking to pay, like by scanning a QR code. Contactless payments using NFC in cards and phones do not quite cut it, and require a terminal.

baxtr• 6 years ago

What about PayPal? I think they provide a unique link

smachiz7• 6 years ago

How is QR any different than NFC from a user perspective? Both require a terminal to be effortless for the consumer (an LCD or e-ink display that shows a real time QR with transaction details like amount, or an NFC chip that does the same thing).

I think QR is slightly worse since I have to open my camera app, or open my payment app and select camera, vs just waving my watch/phone at a terminal.

Things like metro payments are 100% doable with NFC and would be an awful nightmare with QR.

reader_mode• 6 years ago

I think Visa is working on NFC to phone for Android (without a terminal)

https://www.globalcosmeticsnews.com/visa-tap-to-phone-to-exp...

dmos62• 6 years ago

I understand that we're talking about feeding "AI" data here, so it's kind of moot, but I'd like to point out anyway that most of us don't want the merchants to know who we are (or to feed the "AI" in general).

rmah• 6 years ago

It may surprise some folks here on HN, but in the real world, the vast majority of people don't care if merchants "know who they are". I'd bet that there are more people want merchants to know who they are than there are people who explicitly don't want them to know. But that said, the vast majority simply don't care. Just my opinion, of course.

yurlungur• 6 years ago

His point is less about what customers want but more about the value of the data being collected. By providing a payment service you are harvesting a large amount of data "for free" that can be directly turned into money.

nirui• 6 years ago

Lee is a smart guy. But I think his missed one important point: It's not about fees. No it's not even about easy to use.

In China, technically anyone can setup a "business" account on Alipay with just one tap and then start to collect payment right way, the story is completely different if you have to deal with banks. Then with all that, you add the fact that not everybody here uses credit card which raises the bar for credit card adaption up yet again.

I'd recommend people who interested about the related development to checkout the DC/EP project. Which is aimed to be an alternative to Alipay and WeChat Pay, but backed by the banks.

jariel2• 6 years ago

It's definitely about the fees and underlying structures.

No economy is 'suffering' because businesses have to 'deal with a bank'. It could be smoother, but it's mostly not a big deal.

Since the world has 'gone digital' the '2%' system setup became the natural medium and it's possibly a bigger problem than Google and FB, it's just that nobody wants to talk about it.

01100011• 6 years ago

Do WeChat Pay or AliPay offer payment protection and dispute resolution?

neves2• 6 years ago

The 2% is a tax in the world economy that goes to America. And in a lot of countries, the credit card companies cartel charges a lot more of 2%

Cu3PO422• 6 years ago

The credit card fees are made up of multiple smaller fees: the largest part, the interchange fee goes to the issuing bank wherever it is in the world. The scheme fee goes to the scheme (e.g. Visa, MasterCard, ...) which is indeed ultimately a fee that goes to America, however it is much lower than 2%.

jorblumesea• 6 years ago

Venmo, Paypal and other forms of digital payment are extremely popular. It's not as ubiquitous as WeChat but it's not some unknown quantity. The US has a hybrid system with mixed credit card and digital pay systems.

x87678r• 6 years ago

One thing is how can this be a $300B company if there are tiny fees?

valuearb4• 6 years ago

Because Wall Street sells junk like this to suck, er, retail investors and tells them financials don’t matter.

wombatmobile4• 6 years ago

You might similarly ask how Alphabet can be a $1 trillion company when it charges no fees for google search, maps, or Android.

blackrock• 6 years ago

By massive volume? Or by targeted ads, since the company has an idea of what you buy. And your phone is just a convenient personalized billboard in your pocket.

trophycase• 6 years ago

They are both middlemen. If Alipay is more profitable than Visa, they are extracting even more rent and thus "taxing the economy" even more heavily.

goatinaboat• 6 years ago

In China, with WeChat and Alipay, anybody can pay anybody. We can do micro payments and there are no fees

If you aren’t paying, then you are the product.

BizyDev• 6 years ago

The point is that with Visa/Master Card you're the product and you pay for it.

FYI They both sell your data to brokers.

peacefulhat3• 6 years ago

Haven't used Alipay but Wechat is really annoying because they get your Wechat contact info and text you ads. Other than that, yeah it blows away US payment system. Amazon Go store has potential to get us back on top, though.

valuearb4• 6 years ago

Thus us how the street sells garbage to retail investors. Focus on strategy, product, benefits, etc, anything other than actual financials.

sjg0072• 6 years ago

It does raise the question of why don’t we have QR payments. And why not have a line of credit behind it.

gruez11• 6 years ago

Because compared to swipe/NFC payments, it's a downgrade or a sidegrade.

Advantages:

* cheap, no need for a dedicated terminal

Disadvantages:

* requires internet connection for both parties (credit cards only require the merchant to be connected)

* cellphone is a single failure point (eg. losing it, battery running out, dropping it), whereas you can carry spare credit cards

* scanning is worse ux than tapping

angio2• 6 years ago

Isn't this classic innovator's dilemma? On one hand we have the incumbent that provides a good, polished solution to the problem (credit card companies), on the other we have the innovator that can focus on markets that are too small for the incumbent (micro transactions, small shops etc).

franklampard2• 6 years ago

You are right about the advantage, which doesn’t not make it an downgrade.

It literally takes $0 and seconds to setup cashless payments

_-___________-_4• 6 years ago

requires internet connection for both parties (credit cards only require the merchant to be connected)

In China it's quite common for the merchant to have a static printed-out QR code for receiving payment. This requires a connection only for the payer (and merchants will often have WiFi available, so you're likely to be able to connect one way or another). These merchants tend to just trust you when you pay and then show them the "paid" screen on your phone. You could fake it, but I guess in general people don't, and the "paid" screen does include the merchant's chosen profile image, so you would have to have done your homework to fake it.

scanning is worse ux than tapping

This is really true. When I lived in Shanghai it was pretty common to be stuck behind someone at the metro turnstile who was trying to use the stupid QR scanning thing to get in. Contactless is much smoother, but at one time QR code was the only way to use your mobile device to get into Shanghai's metro. Now Apple Pay supports the Shanghai transit card.

sjg0072• 6 years ago

Dunno. I could carry around a card with a QR code on it or embedded on the chip to solve that problem.

Jommi3• 6 years ago

Doesn't require active internrt connection. There is an SMS and credit based fallback for when connectivity is low.

Scanning is better than tapping as it can be done from range.

scarmig5• 6 years ago

One consequent advantage of cheap that you leave off:

Ubiquity.

I can't assume that every place, even in the most sophisticated cities in the US, will support NFC payments. Most don't, actually. So I still have to carry around a credit card and use it, with all the inconvenience and security issues associated with it.

Also, that cheapness allows for user experiences that are prohibitively expensive for NFC. E.g., paying at your table after eating.

seanmcdirmid2• 6 years ago

QR is really awkward compared to NFC. It might make sense for person to person transactions, but otherwise I really prefer tap and go.

whoevercares• 6 years ago

Well in China people also scan QR stick on the wall when exiting the parking lot, which seems handy. Also in some places You could start paying while you are in the line by scanning the QR. Anyway it has seen vast success in China

tokai• 6 years ago

I paid for my diner earlier by scanning a QR code. It's only something I do when I have forgotten my card, as it is much more of a bother than contactless.

sct202• 6 years ago

PayPal's app has a Pay in Store QR code but I don't think I've seen anywhere that actually uses it.

wcerfgba• 6 years ago

A reminder that Jack Ma is a supporter of the 996 working schedule, which is hazardous to one's wellbeing and illegal under PRC labour laws.

https://996.icu/#/en_US https://github.com/996icu/996.ICU

cmdshiftf42• 6 years ago

Are people being forced to work for him?

lakecresva• 6 years ago

He's a person with influence who is endorsing a labor practice. I'm pretty sure no one was ever forced to work for Karl Marx or Adam Smith, yet somehow their opinions on labor managed to affect peoples' working conditions.

booleandilemma• 6 years ago

Have you not seen how companies (especially tech companies) bandwagon on each other?

The company I work for follows several practices Google and Spotify follow, even though they don't make sense for us.

lotsofpulp3• 6 years ago

Are children and poor people forced to work in sweatshops?

abc-xyz2• 6 years ago

Also worth noting that all the Chinese companies that operate popular browsers (Tencent, Alibaba, Xiaomi, and Qihoo 360, etc.) ended up censoring that specific GitHub page because they didn't like it (https://www.theverge.com/2019/4/3/18294030/tencent-xiaomi-ch...).

And the way they did it was so shady. They basically revealed to the world that they are able and willing to replace the content on any website and as a user then you'll have no idea if they did it or not (for instance, one of the browsers made the repo visible but prevented people from starring the repo). CCP could easily order all these browsers (which come pre-installed with their cheap phones) to rewrite the content on any website. Imagine them rewriting the content of Wikipedia articles, Twitter posts, Google search results, hijacking download links to download software bundled with spyware (e.g. if you were to download Chrome), etc.

If they're willing to engage in such shady behaviour and break all users' trust just because they didn't like a repo complaining about long work hours, then imagine what they would do with all your financial transactions. My god. The fact that we're allowing these companies into our markets truly saddens me.

kleton• 6 years ago

They really ripped off the Alibaba shareholders when they just split it off in 2011 with no compensation.

gruez11• 6 years ago

So who were the owners after the 2011 split? Did alibaba essentially sell off one of their divisions to jack ma for $0?

ryanar• 6 years ago

If you want to learn more about Jack Ma's story I highly recommend Alibaba: The House That Jack Ma Built [1]. Chinese tech is this separate bubble that has grown independently from the rest of the world and it is fascinating to me.

[1] https://www.goodreads.com/book/show/25817524-alibaba

eunos2• 6 years ago

An excellent exposition describing what ant group is.

https://emerging.substack.com/p/chasing-ant

bofadeez5• 6 years ago

This is not an IPO by a private company. This a wholly owned subsidiary of a government, just like Saudi Aramco. Jack Ma is a high ranking CCP member with government money, not a private businessman: https://www.bbc.com/news/business-46353767

peacefulhat3• 6 years ago

You've fallen for propaganda

bofadeez5• 6 years ago

You've fallen for propaganda. Read and learn: https://www.bbc.com/news/business-46353767

tanilama2• 6 years ago

And..?

It doesn't IPO in Western countries anyway.

bofadeez5• 6 years ago

And nothing. I agree with you that it's not a controversial thing to say.

paxys• 6 years ago

So Jack Ma being one of 88 million communist party members in China means his company is fully owned by the Chinese government? What are you smoking?

cepp2• 6 years ago

1) Jack Ma is neither the CEO nor the majority shareholder in Ant. [1]

2) Jack is one of > 91.2M party members in China. As are most high-ranking managers and professionals, it's simply a fact of life. [2]

Nothing about 1 or 2 makes Alibaba Group or Ant a state owned enterprise (SOE) more than any other company in China. Everything in the world need _not_ be late stage capitalist democracy. There are plenty of ways to attain success and happiness. Lastly, Ant isn't even IPOing in the West. If you disagree then vote with your wallet (or don't).

[1] https://www.alibabagroup.com/en/ir/pdf/160614/12.pdf

[2] https://www.statista.com/topics/1247/chinese-communist-party...

gonehome2• 6 years ago

I'm more skeptical after seeing this: https://youtu.be/f3lUEnMaiAU

I would have expected being a party member to just be the default in order for anyone to do anything of substance in China, but he comes across extremely poorly in that interview.

So poorly, that I find it more likely that the companies are being propped up/operated by the government than someone like him could successfully build/run them.

Maybe I'm indexing too much on that, but watch it for yourself, definitely weird.

bofadeez5• 6 years ago

"it's simply a fact of life" - No

"Everything in the world need _not_ be late stage capitalist democracy. There are plenty of ways to attain success and happiness."

- You meant to say "early stage" and of course there are many ways to attain success and happiness. That's why we allow people to make their own choices, elect their own representatives, and speak freely. We don't force them into accepting one single system, like they do in China. In America, we believe humans have inalienable rights that the government has no authority to usurp. The government exists subserviently to protect our rights to pursue happiness as we see fit, provided we don't infringe on the rights of others. If you want to go live in a communist community within a free society, you're more than welcome to share your income with a group of people. What you have in China is totalitarianism / authoritarianism, which we believe is axiomatically immoral, as it removes option for people to decide on their own, it removes the inalienable rights that all humans naturally have at birth. Don't you agree that you own your physical body, and you own the fruits of your labor? Don't you think you have the right to express criticism against leaders? From where exactly do they derive their authority? It's not by elected mandate. I would love to hear why you think restricting freedom and being a cheerleader for totalitarianism / authoritarianism can (even in theory) lead to greater happiness. Thank you!

lemax• 6 years ago

The Economist recently had some great analysis on Ant Group's evolution and how it does internal credit scoring https://www.economist.com/briefing/2020/10/10/what-ant-group...

SpaceRaccoon• 6 years ago

Any non-paywalled links?

partingshots• 6 years ago

It was very frustrating to see, as a former Alibaba shareholder, Ant Financial get spun off with zero compensation or new share distribution. My primary reason for buying Alibaba in the first place was for Alipay.

It was a good learning experience though to be honest. Since then, I stay away from Chinese stocks on principle. I was lucky enough to be able to sell off my shares without losing anything this time, but who knows what could have happened.

bassman9000• 6 years ago

Many US investors are going to receive a rude awakening a few years from now, if not before.

https://www.uscc.gov/research/chinese-companies-listed-major...

https://www.cnbc.com/2020/05/19/nasdaq-to-tighten-listing-ru...

And sadly, as usual, fund managers will face zero consequences.

blahblahblogger• 6 years ago

Does the US have protections that prohibit companies from doing that? Or is it just that there's more faith in our legal system if a company does what isn't in the shareholders' best interest?

rokobobo• 6 years ago

I believe that the managers of the company that sells/spins off a subsidiary have a fiduciary duty to get the best price for shareholders in such a transaction. This is even more so the case when a major stakeholder gets to benefit from such a transaction.

batt4good• 6 years ago

I wouldn't touch this with a ten foot pole. This reeks of fake inflated / manipulated Chinese currency / gov't backed debt.

Jack Ma's Ant Group set for record $34B market debut

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