
The Chinese Communist government is stripping Alipay, owned by Jack Ma’s Ant Group, of its lending platforms Huabei and Jiebei. The government will also force the company to turn over user data. Sun Yu and Ryan McMorrow report in the Financial Times:
Beijing wants to break up Alipay, the superapp owned by Jack Ma’s Ant Group that has more than 1bn users, and create a separate app for the company’s highly profitable loans business, in the most visible restructuring yet of the fintech giant.
Chinese regulators have already ordered Ant to separate from its main business the company’s two lending units — Huabei, which is similar to a traditional credit card, and Jiebei, which makes small unsecured loans — into a new entity and bring in outside shareholders.
Now officials want these lending businesses to have their own independent app as well. The plan would also require Ant to turn over the user data that underpins its lending decisions to a new and separate credit scoring joint-venture that would be partly state-owned, according to two people familiar with the process.
“The government believes big tech’s monopoly power comes from their control of data,” said one person close to financial regulators in Beijing. “It wants to end that.”
The move may slow down Ant’s lending business, with the enormous growth of Huabei and Jiebei partly powering its planned IPO last year. The CreditTech unit, which includes the two units, overtook Ant’s main payment processing business for the first time in the first half of 2020, to account for 39 per cent of the group’s revenues.
The size of the unit, which helped to issue about one-tenth of the country’s non-mortgage consumer loans last year, surprised regulators who fretted about predatory lending and financial risk.
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