Alibaba affiliate AGTech Holdings Limited announced today (Thursday) that it has completed a proposed HK$778 million (US$100 million) acquisition of the SAR’s sole mobile payment provider, Macau Pass Holding Ltd, in a move, the group’s CEO considered would help deepen the interconnection of the local mobile financial infrastructure with the Greater Bay Area.
In a statement issued after a signing ceremony today, AGTech indicated that the completion of the acquisition will create “tremendous synergies” to its existing businesses and broaden the revenue base of the group through integrations along the value chain.
AGTech Holdings is a Bermuda-incorporated and Hong Kong-listed investment holding company mainly engaged in lottery technical services, which first announced an agreement had been reached for the purchase of the entire equity interest in Macau Pass Holding Ltd. and its subsidiaries in September, 2021.
All relevant regulatory consents and approvals in connection with the proposed change in shareholding of Macau Pass were approved by the Monetary Authority of Macau (AMCM) last week, with the deal finally closed today.
Alibaba Group and Ant Group jointly hold approximately 55 per cent of AGTech’s equity, with Macau Pass now an indirect wholly-owned subsidiary of AGTech.
AG Tech also indirectly owns 33.3 per cent of Ant Bank (Macao) Limited, with Sun Ho and non-executive Director, Ji Gang, acting as directors in the bank. The remaining 66.7 stake is held by two indirectly wholly-owned subsidiaries of Ant Group.
Ant Bank officially commenced operations in April 2019, with a business scope of providing mobile payment services and financial banking services such as deposit, loan and remittance services to residents and local small and medium-sized enterprises.
Founded in 2006 by Alfred Liu Hei Wan, Macau Pass is the leading payment service provider in Macau and issued the first and the most commonly used contactless smart card for payments in Macau, the Macau Pass Card.
While initially used in bus fare payment system, its usage has later been expanded into a wide range of payments such as those for other public transports, car parks, government services, retail consumptions, and food and beverage services, with the company indicating that there are currently three million MP Cards issued.
The company also launched the first mobile payment platform in Macau, the MPay e-wallet, covering online and off-line payments, transfers, utility payments like telephone, water, electricity and gas bills and public transport, with over 90 per cent of Macau residents being registered MPay users.
In 2019 the People’s Bank of China and the AMCM authorised Macau Pass to carry out cross-border operations between Hong Kong and Mainland China, making it the first financial institution having offshore headquarters to be granted the right to use its offshore e-wallet across the border in Mainland China.
“Over the years, Macau Pass has been actively involved in the local fintech industry, expanding its e-payment applications to different levels of Macau people’s daily lives. AGTech shares Macau Pass’s ideology of livelihood services-oriented. While enabling a stable transition of Macau Pass, we will cooperate with the local government to turn Macau into a smart city of the 21st century,” the CEO of AGTech indicated in the announcement.
Ho indicated that AGTech will expand mobile payment services to support merchants and SMEs in order to speed up services and the development of digitization and intelligence management to meet the increasing consumer demand in the Greater Bay Area.
“This can provide users with stable, secure and efficient mobile payment experiences while giving Macau our support in its next new phase of the digital economy,” the AGTech CEO noted in the announcement.
According to the businessman, the Greater Bay Area development plan advanced by central authorities will help Macau Pass become the “leader of local fintech innovation” and help propel the diversification of Macau’s economy and the growth of its fintech industry.
“At the same time, it can also deepen the interconnection of the mobile financial infrastructure of Macau, Greater Bay Area, Guangdong-Macao In-Depth Cooperation Zone and Mainland China,” Sun Ho added.
“From here, we are preparing ourselves to tap into a market with 1.4 billion potential users and to jointly explore overseas opportunities and facilitate the international grand economic cycle”
The purchase is to be carried out via AGTech Investment and AGTech Services, two AGTech indirect whole-owned subsidiaries, which acquired Macau Pass Holding Ltd., the entity responsible for Macau Pass from Alfred Liu Hei Wan – chairman of Transmac and Macau Pass – Joe Liu Cheuk Yin – his son and Macau Pass Director and – Lao Kin and Vong Chak Kin.
A total of 99 per cent of Macau Pass Holding’s shares share held by Alfred Liu, with a HK$762.5 million consideration to be provided by AGTech Investment, with the remaining HK$15.4 million divided by the remaining shareholders.
AGTech recently reported its 2021 financial results, reporting a 53 per cent year-on-year increase in revenue to HK$253.2 million, with net losses reduced to HK$63 million.
For the year under review, revenue contributions were mainly derived from lottery hardware sales, provision of lottery distribution and ancillary services, non-lottery hardware sales in the PRC, and games and entertainment business in India.
According to the statistics of the AMCM, the number of mobile payment transactions in Macau has increased from MOP65.4 million in 2020 to MOP193 million in 2021, representing a year-over-year increase of 194 per cent.
The total transaction value also jumped by almost 200 per cent last year to MOP18.52 billion in 2021.
The rapid transition in mobile payment use has been attributed to the advancement of Macau pandemic relief policies that required the use of Macau Pass cards and mobile payment terminals by local SMEs and residents.
In 2021, the Government of Macau further facilitated the promotion of electronic payment by launching the Simple Pay service, an integrated payment system that allows merchants to accept various types of electronic payment methods in Macau by a single payment terminal or a QR code.
As of November 2021, over 80 per cent of merchants in Macau have upgraded to the Simple Pay system.
