It’s not everyday that a Goldman Sachs partner jumps ship to join a startup. It’s also not everyday that said startup has 450 million users. That’s exactly the situation Douglas Feagin found himself in when he joined Ant Financial earlier in 2016 as head of the firm’s international operations.
China’s Ant Financial, the financial arm of Alibaba, powers payments for the online retailer and other internet properties it owns. It currently processes 180 million transactions every day. As more Chinese consumers travel abroad, Ant Financial wants to support them wherever they go and that’s what Feagin intends to do.
“We started by looking at what we do with Alipay in China,” Feagin said to a packed room at the Money 20/20 conference held this week in Las Vegas. “We see payments for online services evolving to support a global lifestyle.”
That global lifestyle is codeword for lots of travel. So, Ant isn’t going after global customers. Yet. But it is pursuing a tourist-centric payments strategy that makes it easier for Chinese consumers traveling abroad to buy things. Feagin and Ant Financial are quickly growing its merchant network stateside, working with a variety of merchant acquirers to get there. Chinese tourists can use their Alipay accounts to shop at Duty Free Stores in San Francisco, for example.
The company also just announced partnerships with Verifone and First Data, a move it believes will help it to expand its retail presence in the U.S. Ant Financial is working with Ingenico and Wirecard in Europe to execute its expansion strategy.
The Chinese tourism industry is booming as 120 million people traveled outside the mainland, a 17 percent increase over 2015. Chinese tourists’ average spend is among the highest in the world. “Luxury tax is pretty high in China, so you get people buying things abroad that they wouldn’t normally buy at home,” he said.
Domestically, Ant Financial keeps rolling out new services. Consumers can use Alipay to split bills at restaurants, order and pay for healthcare, and even to make an appointment to get married. Ant’s Alipay was also behind turning an obscure holiday, Singles Day, into an ecommerce bonanza. 11/11 easily surpassed the Black Friday in the U.S., and Alipay alone processed $14.3 billion just on that day in 2015.
Feagin’s ambitions are also large in scale. The Ant Financial executive set a high-water mark of expanding his firm’s merchant network to 1 million over the next few years. He also intends to increase Ant’s 450 million users to 2 billion worldwide. Globalization should play a big role in that through an in-country partnership strategy.
“In India, Paytm went from serving 35 million customers to 150 million over the course of our partnership in 1 year,” he admitted.