OREANDA-NEWS. February 02, 2017. MoneyGram is thus an aging service in need of a shine, a fact reflected in the small 11.5 percent premium to the stock market price that Ant Financial is paying. MoneyGram is also dwarfed by the No. 1 money transfer service, Western Union. But Ant Financial’s acquisition is about leveraging MoneyGram’s ground presence to service the 100 million-plus Chinese who travel abroad every year and use the company.

The idea is pretty simple. Plug those travelers into Ant’s huge network and MoneyGram instantly has an enormous digital presence. At the same time, Ant achieves global reach — and entry into the United States — for less than \\$1 billion.

The deal sets up an interesting test for the new administration.

President Trump has repeatedly accused Beijing of devaluing its currency to put the United States at a disadvantage, but his administration has not yet honored his promise to name China a currency manipulator.

The question is whether heated political talk will translate into actions that affect all Chinese investment in the United States. On the campaign trail, Mr. Trump said he would block Chongqing Casin Enterprise Group’s acquisition of the Chicago Stock Exchange even though it was a small deal for an exchange that has little of the market in trading.

If Mr. Trump wants to deal with Chinese investment and the Ant Financial deal, he has the existing apparatus. The MoneyGram acquisition will be reviewed under the Exon-Florio Amendment. Exon-Florio is the touchstone law that lets the president block foreign acquisitions that threaten national security.

Under the law, the president has delegated his review ability to a group representing nine agencies — the Committee on Foreign Investment in the United States, or Cfius. The MoneyGram deal will be reviewed by Cfius.

There is no legal definition of what constitutes a national security threat. Cfius has tended to apply a broad interpretation, even though most transactions pass muster. In 2009, for example, a Chinese company was halted from buying a gold mine because it was too close to a United States military base. Huawei Technologies, the large Chinese telecommunications equipment company, has repeatedly been blocked from acquiring American companies because of its alleged ties to China’s military.

In Ant’s case, the company is not affiliated with the military. The Chinese government, however, is represented among its largest shareholders, including China’s sovereign wealth fund, a large state-owned bank and a social security fund.

So how will Washington look at this acquisition? In a basic sense, the threat to national security is tangential — this is a payment service with many competitors. Yet MoneyGram is part of the backbone of domestic and international wire transfer.

In addition, the United States has been finicky about Chinese banks doing business here. Only recently have these lenders been licensed to operate in this country. Concern about safety and soundness have been the reasons. But a bank has yet to be vetted over the issue of national security. MoneyGram is licensed in New York and Georgia, and those regulators will presumably need to approve its transfer.

Still, these approvals are likely to come, leaving Cfius as the big hurdle. The Trump administration may come to view the case as a way to show it is opposed to Chinese investment in the United States.

The two companies are well aware of what is at stake. Ant Financial has agreed to pay MoneyGram \\$17.5 million if the deal is blocked as a result of national security review.

The matter may also provide a test case for the reach of banks and payments services. Ant Financial has been rattled by the fallout in China over the default of the telephone maker Cosun on \\$166 million in bonds that were sold to retail investors on Ant’s financial marketplace.

The default shows how quickly finance in China has grown and spread to small investors. It also highlights that new products and new technologies in finance can sometimes arise with a lack of consumer protections. Ant Financial may bring innovative practices to the United States, but some officials in the administration may be wary of the change that could result.

So far, Ant Financial has gotten off on the right foot with the new administration. Jack Ma, Alibaba’s founder, who controls Ant Financial, met with Mr. Trump in January, before the inauguration.

“It was a great meeting,” Mr. Trump said after the meeting. “Jack and I are going to do some great things.”

Despite those friendly words, Mr. Trump the deal maker may try to seek some concession from Ant Financial as a condition for approval (putting aside the legal questions of such requests). Or the administration could decide that Ant Financial and Mr. Ma are not where they want to take a larger stand against China.

The stark alternatives are dizzying in their implications, like many things coming out of Washington.

So watch this deal, as the administration’s actions will say a lot about the tone on investment in the United States for years to come.