China's fintech firms extend overseas

Chinese shoppers can now enjoy a real-time VAT refund service via their mobile phones at airports in three European cities - Milan, Munich and Helsinki - saving them weeks of waiting to receive the refund by card.

The announcement, made on Feb 2 by Ant Financial Services Group's payment arm Alipay, is the latest milestone in Chinese fintech companies' overseas expansion. Last month, Alipay collaborated with Finnish mobile payment provider ePassi to begin taking mobile payments for shopping and services on Finnair flights, marking the first ever mobile payment service in the air.

"In the fintech and mobile internet sectors, China is a global leader thanks to business, innovation, market size and population density," says Alexander Yin, chief financial officer of TCG, parent company of ePassi.

The fintech sector grew rapidly in the wake of the 2008 financial crisis, as the downturn cast doubt on traditional banking models.

China's strong startup culture, significant venture capital availability and demand for alternative financing have all contributed to its fintech boom.

A 2016 report by KPMG, a professional services company, and the Australian investment firm H2 Ventures notes that five of the world's top-10 fintech companies are Chinese. Ant Financial topped the list. Another report by EY notes China has eight of the world's 27 fintech unicorns - startups worth more than $1 billion.

The United Kingdom signed an agreement with China to help cross-border fintech investment in November. The Irish Minister for Financial Services Eoghan Murphy also recently led a delegation of fintech firms to visit China in search of opportunities in Belt and Road Initiative countries.

Other notable Chinese fintech firms expanding into the UK include big-data firms Wind Info Co and BBD, both of which established London operations last year.

BBD, known for its innovative data analysis algorithms, is now developing indexes specific to the UK and European markets, with one index assessing the credibility and risk profile of UK crowdfunding platforms and companies, expected to be launched in the second half of 2017.

Wind Info, dubbed the Chinese Bloomberg terminal, is eyeing opportunities to sell its data on Chinese and Asian asset classes, including equities, bonds, funds and commodities, to European investors.

cecily.liu@mail.chinadailyuk.com