KUALA LUMPUR -- Ant Financial, a unit of China's e-commerce provider Alibaba Group Holding will partner Touch 'n Go, a unit of Malaysian leader CIMB Group Holdings to offer mobile payment solutions, as more local businesses adopt cash-free transactions.
Both companies signed definitive agreements on Monday to form a joint venture that will roll out mobile payment solutions modeled after Ant Financial-owned Alipay. The companies said the venture will be launched "as soon as possible."
Touch 'n Go operates a contactless card of the same name in Malaysia for payment at toll roads, for public transport and parking. By adopting Alipay-enabled technology, Touch 'n Go's 10 million active card users could have access to more services on their smartphones, including e-commerce.
Online shopping has gained traction in recent years, leading to the mushrooming of online retailers along with payment providers. iPay88, one of the largest payment providers owned by Japan's NTT Data said it handled nearly 40 million transactions worth 3 billion ringgit ($700 million) in 2016, roughly double the level recorded in the previous year.
Monday's announcement by Ant Financial and CIMB is part of a bigger deal agreed between the Malaysian government and Alibaba in March to back the digitalization of the local economy.
Under the supervision of Alibaba Executive Chairman Jack Ma who is also a digital economy adviser to the Malaysian government, the Chinese e-commerce giant will set up a logistic hub at Kuala Lumpur International Airport and cross-border online trading infrastructure.