Ant Financial, the financial services arm of Chinese e-commerce giant Alibaba, is stepping up its global expansion with plans to set up a mobile money subsidiary with Kakao, the company behind South Korea’s most popular messaging app.

According to media reports, Ant Financial will invest $200 million in Kakao Pay, which will be spun off into a separate unit by early April. Kakao’s board reportedly decided in January to form a separate entity for its Kakao Pay financial service brand.

Ant Financial, operator of mobile payments platform Alipay, which claims 450 million users globally, recently agreed to invest an undisclosed amount to acquire a significant minority interest in Globe Telecom’s fintech subsidiary Mynt. Ayala Corp, one of the largest conglomerates in the Philippines, is also taking a minority stake in Mynt.

The latest partnership will allow Chinese tourists in South Korea to use Alipay’s digital payments platform and access Kakao’s network of 34,000 merchants, the two companies said in a joint statement. Ant said it will offer a wide range of digital financial services through Kakao Pay.

Kakao Pay CEO-elect Young-Joon Ryu said the combination of Ant’s global payment platform and numerous financial and commerce service networks and Kakao’s platform capabilities will result in more effective and convenient financial solutions for businesses and consumers, The Korea Herald reported.

Last June Ant took a 20 per cent stake in Thai online payment provider Ascend Money. It also holds a 25 per cent stake in India-headquartered mobile wallet company Paytm.

The investments come as Ant moves to expand outside of its home market and prepares for a multibillion-dollar IPO which could come as soon as this year.