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Latest Update on Amazon, Walmart, and Alibaba

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Part 13
Latest Update on Amazon, Walmart, and Alibaba PART 13 OF 13

Hurdles in Alibaba’s Path to Swallow MoneyGram

MoneyGram makes a case for the Ant Financial deal

MoneyGram (MGI) is ready to join Alibaba’s (BABA) sprawling business empire that began with e-commerce and has now extended to payment support and cloud computing (QQQ).

While releasing MoneyGram’s 2Q17 results, the company’s CEO, Alex Holmes, noted, “We are excited about our pending transaction with Ant Financial which will strengthen MoneyGram’s business, increase U.S. jobs, promote financial inclusion by helping more customers access innovative, secure and reliable financial connections, and deliver value to all of our stakeholders.”

Hurdles in Alibaba’s Path to Swallow MoneyGram

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Data security questions

While the idea of increasing US (SPY) jobs may appeal to the Trump administration, some US lawmakers are leery of the idea of surrendering a legacy US money remittance firm to a Chinese company.

Although Ant Financial says that it will keep MoneyGram’s data infrastructure in the US, concerns remain that American citizens’ personal information held by MoneyGram could get into the wrong hands once the deal closes.

Centralized clearinghouse

A recent move by China’s central bank (MCHI) regarding a clearinghouse for the country’s mobile payments services has raised tensions over a potential national security threat that the MoneyGram–Ant Financial deal could pose to the US.

According to the Financial Times, China’s central bank has created a centralized clearinghouse through which mobile payments will be funneled. Alibaba’s Alipay and Tencent’s Tenpay are China’s top money payment services, controlling more than 90% of the market.

For Alibaba and Ant Financial, the clearinghouse move could make it difficult for them to convince US regulators that they can protect MoneyGram’s data from the Chinese government.

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