Is Ant Financial hitching its global expansion to an antiquated payments wagon that is being undermined by a wide range of remittance startups?

That appears to be case for Ant’s proposed $880 million acquisition of 72-year-old MoneyGram, which was announced today.

Ant Financial is the financial service spin-off from Chinese e-commerce giant Alibaba.

MoneyGram’s value-transfer model is under attack by a rash of fintech startups. Fintechs are are trying to break into the space and the incumbents — banks, Western Union, PayPal, and, yes, MoneyGram — are looking at things like blockchain and other technologies to upgrade their own products.

“Payments are eating the value-transfer sector,” Marco Montes Neri, founder of global remittance company Saldo, told Bank Innovation. “People now have online wallets, mobile banking and payments are becoming real-time, so traditional services — like money transfer — which are risky and expensive to operate, will definitely be decreasing in volume.”

That’s largely why MoneyGram, which was founded in 1940, has been stuck in neutral for years. Its stock has languished since the credit crisis ended, and the company has only seen modest revenue growth over the last few years — except in digital money transfer, which increased 12% last quarter, from the same time a year prior.

So why did Ant do the deal?

“I think this deal is more about Ant Financial expanding services into adjacent markets,” said Scott Harkey, payments practice lead at Levvel, a consultancy. “The cornerstone of a remittance business is the banking relationships throughout the world, and Ant Financial has been building those in key markets over the last several years. With their strong ties into the Chinese, Indian (with the Paytm partnership), and now the U.S. market, Ant Financial seems to be doubling down on serving as a major conduit for money movement across the globe.”

Still, while MoneyGram is the second-largest money transfer service in the world with a network of 2.4 billion accounts, users are no longer content to wait two or three days for their transfers to settle. Enter the Remitlys and Saldos of the world.

Ant has such a service: Alipay. But Harkey does not expect AliPay to gain much from this deal.

“It will be a while before we see them trying to leverage that for the Alipay business, as the digital wallet market is already a crowded space in the U.S., and is predominately controlled by the Mobile OS providers and the existing payment networks,” Harkey said.

Alipay service already allows its 450 million users to transfer money, though not for free, when it comes to transferring funds into a non-Chinese account, as well as make payments.

As for MoneyGram, its brand builds in China, the world’s largest economy. MoneyGram only has about 80 locations there at present. (One potential complication is that in China, MoneyGram currently works with UnionPay, an Alipay competitor.)

MoneyGram and Ant Financial did not provide immediate comment on this story.

“Typically money transfer companies have been providing cash-based services, and that world is losing its momentum as regulations have been pushing on KYC,” Neri said. “The only resolution for the sector is to move towards more electronics solutions, like the payments industry. The different worlds are connecting.”

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