Alibaba Group Holding Ltd subsidiary Alipay is in talks to acquire up to 25% stake in Wirecard AG, the Bild am Sonntag newspaper reported Sunday. Alipay is a major payment platform in China, while Wirecard is a financial services and technology company based in Munich, Germany. The newspaper said that the two companies were negotiating a private deal under which Alipay could buy up to 25% stake in Wirecard, Reuters reported. The stake could be increased at a later point. The newspaper did not disclose its sources.
Wirecard provides POS infrastructure, payment processing and acquiring services. The company is working with Alipay, operated by Alibaba unit ANT Financial, to provide mobile phone payment services to Chinese tourists in Europe. In 2014, about 2 million Chinese tourists visited Germany. Europe is the second most popular travel destination of Chinese people. The tourists now can pay with Alipay app at authorized POS retailers in Europe by using integrated barcode payment functionality from Wirecard.
Wirecard declined to comment on the report, but confirmed that it was in strategic talks with various partners. The Chinese company wasn’t talking to Wirecard about an investment, according to a source familiar with the matter.
Shares of Wirecard plummeted by over 10% year-to-date. According to the news report, the German company is interested in a large shareholder “because its share price has come under pressure from short-sellers.”
Alipay is the largest provider of online payment solution in China with 400 million active users. The company owns more than 50% of the market share in online payment and 80% in mobile in China. Its mobile wallet is being widely used for payments in online shops and also at the point-of-sale in the country.
A report by The Wall Street Journal revealed that Alipay handles 58% of all online transactions in the country. The report also noted that some 358 million consumers in China are already making transactions through their smartphones.
Ant Financial Seeking 20% Stake in Ascend Money
In other news, Ant Financial is planning to acquire a 20% stake in Thailand’s Ascend Money, Bloomberg News reported.
Alibaba Group Holding Ltd’s financial affiliate also wants an option to boost its stake in Ascend Money to 30% later in the future, according to a statement on China’s Ministry of Commerce’s website. The company’s plans are being reviewed by the agency.
Ant Financial’s plans to buy a stake in Ascend Money are part of the company’s efforts to expand its online payments and small loans business in Southeast Asia. Ascend Group is a subsidiary of Thailand’s Charoen Pokphand Group, which focuses on agriculture, retail businesses and telecommunications.
Ant Financial is considering an IPO on the Shanghai stock exchange as early as this year, according to people familiar with the matter.
SoftBank Sells Alibaba Shares
SoftBank Group recently sold $10 Billion of shares in Alibaba. Japan-based SoftBank is the e-commerce company’s largest shareholder. The company will use proceeds to reduce its debt. Alibaba’s bonds are welcomed by the investors because of a relatively high annual yield of 5.75%.
Last week, Alibaba ordered vendors on its Tmall medicine e-commerce platform to stop selling over-the-counter (OTC) drugs. The Hebei provincial branch of the China Food and Drug Administration (CFDA) directed the marketplace to stop selling these medicines.
Shares of Alibaba Group Holding Ltd have lost more than 6% year-to-date.