This week Ant Financial announced plans to purchase, MoneyGram, a U.S.-based money transfer service, for $880 million. Ant Financial is Alibaba’s digital payments subsidiary.
The deal understandably caught the attention of WorldRemit, itself a significant player in the international payments space. Company CEO Ismail Ahmed released this statement about the acquisition.
“This deal is a recognition of the importance of remittances as a powerful driver of economic change, at both the individual and international level.
It’s also an interesting development for the money transfer industry as a whole. A convergence of key technological and regulatory trends is driving new M&A activity – this merger comes after PayPal’s acquisition of Xoom in July 2015, and UAE Exchange’s merger with Travelex in January 2015.
Remittances is one of the only industries that keeps even the poorest segments of society connected financially over long distances. It’s a $600 billion dollar industry today and growing, which is why we expect to see more deals of this type in the future.
Remarkably only five per cent today is sent online. The rest is cash, paid in over the counter or at high street agents. However, this is projected to grow six-fold to reach at least 40% in the next few years.