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Beijing Breaking Up Ant’s Alipay, With Separate App For Loans: FT

Regulators want Ant’s two lenders to operate via a different app, and loan applications to be assessed first by a new firm run by Ant and state entities that will decide on users’ credit ratings

A man walks past an Ant Group logo at the World Artificial Intelligence Conference in Shanghai in July. Photo: Reuters.


Chinese regulators are looking to split Alipay’s loans businesses – known as Huabei and Jiebei – from the group’s “super app”, which has over 1 billion users, the Financial Times has reported.

Officials want the lenders to operate via a separate app, and for Ant to turn over user data about its lending decisions to a new joint venture company that does credit scoring.

The JV would be operated by Ant, plus state-owned companies in Zhejiang, its home province, which the company has positive mutual ties with, sources have told FT.

One source said the government wanted to end the group’s monopoly power via their control of the world’s biggest database of lenders.

News that Chinese state entities would set up a personal credit-scoring firm to handle Ant Group’s treasure trove of data was revealed by Reuters and Asia Financial two weeks ago.


Alibaba Shares Down

The latest report on the hiving off of Alipay’s lending business hit shares of the parent company Alibaba, which fell by more than 4.2% in trading in Hong Kong on Monday. The Hang Seng Tech Index was down by 2.43% at the close of trading.

Analysts have warned for some time that such a move was likely. They have also said it would slow the company’s lending business, which accounted for 39% of the group’s revenue in the first half of 2020.

Huabei operates like a virtual credit card, while Jiebei provides small unsecured consumer loans.

There has been debate over the company’s operations and the lending margins of online lending platforms for years.

Critics have previously condemned some online payment firms for lending rates that were ‘predatory’ and claims that students were being targeted and ‘fleeced.’

The central bank released draft rules for the fintech sector in January with a warning that companies that abused their dominance would be split up.

“If any non-bank payment institution in a dominant market position fails to follow the principles of safety, efficiency, honesty and fair competition, and the healthy development of the payment service market is seriously affected, the PBoC can suggest that the State Council’s anti-monopoly law-enforcement agencies stop market dominance abuse and centralisation by splitting the institutions based on payment business types,” Article 57 of the rules said.

Under the plan that regulators are reportedly now considering, Alipay would have to seek a check of a user’s credit profile from the JV it would operate with Zhejiang Tourism Investment Group and other state and private partners, before it is relayed to its lending app for Huabei and Jiebei for the loan to be issued (or not).

The People’s Bank of China has said lending decisions must be made based on data from an approved credit scoring company rather an in-house decision by a group such as Alipay.

The central bank said in July that anti-monopoly measures applied to Ant Group would also be imposed on other payment service companies.  


• By Jim Pollard



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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years.


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