Chinese regulators have ordered sweeping
changes to the country’s biggest payment app Alipay, as the ruling Communist
Party attempts to rein in “the unruly growth” of the tech giants.
Alipay — with more than one billion users in China and other Asian nations
including India — was told to spinoff its profitable micro loan business, the
Financial Times reported Monday, citing a person with knowledge of the matter.
Currently the app allows users to pay with a traditional credit card linked
to their bank or offers small unsecured loans to buy anything from toilet
paper to laptops.
“The government believes big tech’s monopoly power comes from their control
of data,” the source close to financial regulators told the newspaper. “It
wants to end that.”
Alipay’s parent company Ant Group is China’s biggest payments services
Regulators pulled the plug on the fintech conglomerate’s record 37 billion dollars
stock market launch in November, after founder Jack Ma criticised officials
for stifling innovation.
Ma’s business empire has been targeted in a wider crackdown on tech firms
aimed at breaking monopolies and strengthening data security, that has wiped
billions off companies’ valuations.
The outspoken billionaire has largely remained out of the limelight since
the crackdown began.
After separating its payment and loan businesses Alipay will have to hand
over customer data used to make its lending decisions to a new credit scoring
joint-venture that is partly state-owned, two sources familiar with the
arrangement told the Financial Times.
Alipay did not immediately respond to AFP’s questions on how the order
would affect its business.
Regulators have also asked Ma’s e-commerce platform Alibaba and other
internet firms to stop blocking links to rival services, Zhao Zhiguo, a
spokesman for Ministry of Industry and Information Technology, said at a
briefing on Monday.
China’s market regulator last month announced rules to bring down so-called
“walled gardens” built by tech companies that aim to lock users into their
“It is unreasonable to restrict.. access of website links, which not only
affects the user experience, but also damages rights and interests of users
and disrupts the market order,” Zhao said.
“Users have responded strongly against this.”(AFP)