China: regulators call for Alipay to be split up15. September 2021
China: regulators call for Alipay to be split up
Chinese regulators have ordered the split of fintech app Alipay, which is owned by Jack Ma’s Ant Group.
Alipay’s lending business is to be split into different apps. Ant Group has also been ordered to hand over the user data it uses to make credit decisions. This information will be part of a new credit scoring joint venture involving the Chinese government. With this move, the Chinese government aims to curb the market power of the big tech – companies.
In June, regulators asked Ant Group to spin off its two credit businesses, Huabei and Jiebei, into a new company and open them up to outside investors. Huabei is Ant’s credit card arm, and Jiebei offers small unsecured loans to consumers.
Alipay is a third-party payment app that has over 1 billion users. In 2013, it overtook PayPal as the world’s largest payment platform. Shares of Jack Ma’s Alibaba Group fell 4% on the news, dragging other Chinese tech companies with them. The Hang Seng Tech Index fell ~2%. Other losers included e-commerce company Meituan (~5%) and Tencent ( ~2.5%).
Ant Group had planned to launch a $34 billion IPO in November 2020 with a dual listing in Shanghai and Hong Kong. However, this had been thwarted by the Chinese authorities.