51% of China’s $11trn internet-payments market is controlled by one company

China’s internet-payments market is the world’s biggest, reckons Goldman Sachs, with $11trn in transactions last year, twice the size of America’s credit- and debit-card industry. Ant controls 51% of it. The firm is 16 times larger than PayPal, an American counterpart, on this measure.

China’s lead is about more than size, though. People make payments mainly by using phones. Whereas Western products such as Apple Pay typically piggyback off credit-card firms’ networks to access clients’ funds, China’s firms often access bank accounts directly, cutting out the middlemen.

Ant has developed a menu of services: its home screen lets you buy train tickets, pay utility bills and invest in mutual funds. Yu’e Bao, a money-market fund run by Ant, has $166bn of assets. Ant lends to its clients, but so far its balance sheet is modest: outstanding loans to small firms were $5bn in 2016. Fees are low, but Ant’s profits still reached a chunky $820m last year, up by 14% since 2014. (It does not publish its books, but some figures can be inferred from Alibaba’s accounts.)

Crazy to think how little movement there has been in the internet payments industry in Australia. It'll be interesting to see how western governments respond to Ant, and it's competitors, starting to move intro their markets.

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