The financial industry is closely watching Alibaba affiliate Ant Financial's attempt to acquire Dallas-based MoneyGram International, the world's second biggest money transfer company after Western Union. Ant is offering $1.2 billion, more than U.S.-based competitor Euronet Worldwide. If successful, the deal would turn Ant Financial into a financial behemoth with access to MoneyGram's vast network of 350,000 outlets of retail shops, post offices and banks across 200 countries. At present, Ant's business is largely based on the Chinese yuan. The acquisition would also give it access to U.S. dollar funds and escrow accounts for managing the funds. “If you look at MoneyGram, what they might be doing here (to Ant Financial) is bringing a unique extra key that has much to do with that escrow account surplus and be able to hold a lot of dollars,” Jacob Cooke, chief executive officer of Web Presence in China, told VOA. “That, of course, will give them access to a whole bunch more opportunities to Ant's financial services.” Bidding war As Euronet entered the race, Ant Financial hiked its bid by 36 percent, leaving no one in doubt about its determination to acquire MoneyGram and take on Western Union, the world’s biggest money transfer company, on its own terms. But Euronet has so far refused to give up, saying it is reviewing the new situation. Euronet is also battling the Ant's bid at another level. It has gone public in saying the Chinese acquisition bid poses serious security risks as payment companies hold vast amounts of financial data of their customers. Protectionist moves For Ant Financial, the biggest challenge would be obtaining approval of the Committee for Foreign Investment in the United States (CFIUS). Some analysts see it as the first major test for Chinese investments in the face of protectionist moves by the Trump administration. “Getting approval from CFIUS might be more difficult this year. Plus, Chinese acquisitions are more on the media radar than before,” Jeffrey Towson, professor of Investments at Peking University's Guanghua School of Management, said. “And finally, there is also a competing bidder, Euronet, and they will probably push for a regulatory denial based on security concerns”. Two members of the U.S. House of Representatives, Kevin Yoder and Eddie Bernice Johnson, have written to Treasury Secretary Steven Mnuchin questioning the deal. “The proposal merits careful evaluation as it would provide Chinese access to the U.S. financial infrastructure, a move that would pose significant national security risks if completed,” they said. Allaying concerns Ant Financial has tried to allay security concerns, saying that MoneyGram's data will be stored in “iron-clad U.S.-based servers.” In an open letter to MoneyGram's shareholders, Douglas Feagin said MoneyGram will “continue to be headquartered in Dallas and run by its current U.S.-based management team after the deal closes.” He also promised Ant will “continue to invest in MoneyGram's systems and compliance programs.” Alibaba Group chairman Jack Ma was among the first to visit Trump Towers after Donald Trump won the U.S. presidency. Trump recently met Chinese president Xi Jinping, and later said he does not regard China as a currency manipulator anymore. Some analysts see these developments as positives for Ant Financial. “Though CFIUS has given thumbs down to quite a few recent attempted Chinese takeovers, there isn't an obvious national security case here as to why they should stop the transaction,” said Peter Fuhrman, chairman of consultancy firm, China First Capital. Alibaba magic again? An important question is whether it will also enhance the capabilities of the online shopping giant, Alibaba, and in turn pose a new challenge to similar players like Ebay. Ant Financial has served as a platform for carrying out Alibaba's financial transactions in the past, analysts said. “Ant Financial was born out of the fact that Alibaba’s e-commerce platforms were holding huge sums of money in escrow while transactions were completed between buyers and sellers,” Cooke of Web Presence in China, said. “So the natural assumption is that Alibaba can utilize MoneyGram's escrow accounts and add to its own strengths”. Jacob Kirkegaard, a fellow at the Washington-based Peterson Institute of International Economics, said, “Alibaba is arguably the world’s most sophisticated internet finance company. If they see a potential for MoneyGram in their product portfolio, I have no doubt that they can execute the deal and ensure integration.” When contacted, Ant Financial did not reply to VOA's questions and referred VOA to past statements by the company. A public relations firm representing Ant said the company has no relationship with Alibaba and refused further comment. But several analysts, and most recent media reports, describe Ant Financial as a financial affiliate of Alibaba.