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China plans to break up Ant's Alipay and force creation of separate loans app

Alipay logo.   | Photo Credit: Reuters

Beijing wants to break up Alipay, the hugely popular payments app owned by Jack Ma's Ant Group, and create a separate app for the company's highly profitable loans business, the Financial Times reported on Sunday.

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The plan will also see Ant turn over the user data that underpins its lending decisions to a new credit scoring joint-venture, which will be partly state-owned, the newspaper reported, citing two people familiar with the process.

Also Read | Beyond security crackdown, Beijing charts state-controlled data market

State-backed firms are set to take a sizeable stake in Ant's credit-scoring joint venture for the first time, three people told Reuters last week.

The partners plan to establish a personal credit-scoring firm wherein Ant and Zhejiang Tourism Investment Group Co Ltd will each own 35% of the venture, while other state-backed partners, Hangzhou Finance and Investment Group and Zhejiang Electronic Port, will each hold slightly more than 5%, said one of the people.

According to the FT report, Ant will not be China's only online lender affected by the new rules. The company did not immediately respond to a Reuters' request for a comment.

In April, Chinese regulators asked Ant to conduct a sweeping business overhaul, include turning Ant itself into a financial holding firm, and fold its two lucrative micro-loan businesses Jiebei and Huabei, into the new consumer finance firm.

Also Read | Explainer | Why is China cracking down on cryptocurrencies?

Chinese regulatory authorities have been targeting Ant Group and other internet "platform" giants in a wide-ranging crackdown encompassing antitrust and privacy issues, user data and cryptocurrencies.


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Printable version | Oct 23, 2021 3:59:07 AM | https://www.thehindu.com/sci-tech/technology/internet/china-plans-to-break-up-ants-alipay-and-force-creation-of-separate-loans-app/article36424643.ece

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