Ant Financial Services Group, the world's largest financial technology company, is to acquire US money-transfer company MoneyGram International for about $880m.

The deal is expected to shake up the international payments landscape. 

Ant, the payment affiliate of Chinese e-commerce giant Alibaba Group, dominates the online payments industry in China.

With this acquisition it will significantly expand its presence overseas, as competition from domestic rival Tencent Holdings' Wechat payment system heats up. 

The companies said the deal would be subject to approval by the Committee on Foreign Investment in the United States (CIFIUS), a US inter-agency panel that reviews foreign acquisitions of domestic assets for national security concerns. 

CIFIUS has been a stumbling block for several Chinese deals in the US. 

Ant's acquisition of MoneyGram comes against a backdrop of rising tensions between China and the US over President Donald Trump’s willingness to re-evaluate key foreign policy conventions such as the "One China" principle. 

He has also threatened to impose punitive tariffs on Chinese imports.

Trump has, however, met with Jack Ma, the billionaire founder of Alibaba, since his election, describing Ma as "smart" and "open-minded." 

MoneyGram, alongside competitor Western Union, has long dominated the money transfer industry with its large network of retail locations. 

It has about 350,000 outlets in retail shops, post offices and banks in nearly 200 countries and territories. 

Over the past few years, however, brick-and-mortar incumbents have been facing growing competition from more tech-savvy companies that are able to offer cheaper services online. 

The combination of Ant's technological expertise and MoneyGram's large network of agents and established brand could be a game-changer for the industry by leading to more consumers, including migrant workers sending remittances home, to use online transfer services rather than taking cash to storefronts, experts said.

China's financial technology companies are on the rise, boosted by rapid digitisation and the rise of a mass middle class at home. 

Ant raised $4.5 billion in a record funding round in April, valuing the company at about $60 billion, the same as American Express or insurer Chubb and more than any other privately held fintech company. 

Ant has been using its financial firepower to expand at home and overseas as it prepares for a planned initial public offering this year. 

MoneyGram would be Alibaba's second acquisition in the US. Last year, the company bought EyeVerify, a maker of optical verification technology used by US banks. 

The deal comes as the Trump administration commences a crackdown on illegal immigration, which could impact remittances, the money that migrants workers send home. 

Before taking office, Trump threatened to halt money transfers from Mexican nationals unless Mexico agreed to pay for the massive wall he plans build on the US southern border to keep out illegal immigrants. 

MoneyGram had faced a serious liquidity crunch in 2008 after investing in subprime and other risky asset-backed securities, but it was rescued through a $1.5 billion equity and debt deal clinched with Goldman Sachs and Thomas H. Lee Partners.

Ant Financial said it would assume or refinance MoneyGram's outstanding debt, which stood at $937m on a net basis as of September, 30, according to a regulatory filing.