Ant Financial to invest US$73.5m in Yoma Strategic's mobile payments joint venture in Myanmar

Singapore

ALIBABA Group's affiliate Ant Financial is tying up with mainboard-listed Yoma Strategic Holdings as its latest foray into the South-east Asia digital payments space takes it to Myanmar.

This follows its earlier expansion into the Philippines, Vietnam and Singapore.

Ant Financial's latest strategic tie-up is with Digital Money Myanmar (Wave Money) - a mobile payments joint venture (JV) between Telenor group, Yoma Strategic and Myanmar lender Yoma Bank.

Yoma Strategic said in a media release on Monday that Ant Financial - which operates Alipay - will invest US$73.5 million in Wave Money through a new share issuance. If approved, this deal will make Ant Financial a substantial minority stakeholder in Wave Money. Yoma Strategic did not specify the final makeup of the shareholding at this point.

The partnership with Ant Financial looks to promote financial inclusion in Myanmar by targeting the unbanked and the underbanked communities in the country, said Yoma Strategic. Wave Money will lean on Ant Group's experience in building mobile payment platforms to boost its digital competence, capabilities, user experience and service offerings, Yoma Strategic added.

Wave Money runs a network of more than 57,000 agents in urban and rural areas, covering just under 90 per cent of the country. In 2019, Wave Money's transfer volume more than tripled year-on-year to hit US$4.3 billion. Yoma Strategic said Wave Money became Ebitda positive in September 2018, just two years after its launch.

Melvyn Pun, Yoma Strategic's chief executive, on Monday said Myanmar's population is still massively underserved by formal banking institutions, with only a quarter of people having a bank account.

He added: "The Covid-19 situation is accelerating the trend towards a cashless society and drives the growth of e-commerce, and we expect this strategic partnership to massively boost Wave Money's capabilities to support these trends."

Eric Jing, Ant Group's executive chairman, said: "The partnership will enable Wave Pay to tap the experience of Alipay to promote financial inclusion and better serve the unbanked and underbanked individuals and SMEs in Myanmar."

The investment and strategic partnership with Wave Money is Ant Financial's latest play to bolster its presence in South-east Asia as it steps up efforts to expand outside of China.

Ant Financial has applied for a wholesale digital banking licence in Singapore. The fintech affiliate of e-commerce giant Alibaba also reportedly moved to acquire a stake in Vietnamese e-wallet eMonkey late last year. Ant Financial is also connected to another Yoma Strategic investor, Ayala Corporation, which moved just a few months ago to take a stake of up to 20 per cent in Yoma Strategic in November as well.

Ayala, Ant Financial and Globe Telecom have a joint venture called GCash, a mobile wallet in the Philippines aiming for financial inclusion for underserved Filipinos.

Bloomberg reported in November 2019 that Ant Financial plans to raise about US$1 billion for a fund investing in startups in South-east Asia and India, expanding its reach in rapidly-growing mobile internet markets in these parts of the world.

These partnerships are materialising in South-east Asia, where more than 70 per cent of the adult population being either "underbanked" or "unbanked", according to a recent joint report by Google, Temasek and Bain & Company.

The same report noted that by 2025, digital financial services is expected to generate revenues of about US$38 billion across six markets - Singapore, Malaysia, Thailand, Philippines, Indonesia and Vietnam.

Yoma Strategic shares closed at 24 Singapore cents on Monday, up 3.5 cents or 17 per cent.