China plans to break down Ant’s Alipay and force separate lending app to be created

© Reuters. FILE PHOTO: An Alipay brand at the Alipay Shanghai office owned by Ant Group, a subsidiary of Chinese e-commerce giant Alibaba, in Shanghai, China September 14, 2020. REUTERS / Aly Song / File Photo

(Reuters) – Beijing wants to dismantle Alipay, the hugely popular payments app owned by Jack Ma’s Ant Group, and create a separate app for the company’s highly profitable lending business, the Financial Times reported on Sunday.

The plan will also see Ant hand over the user data underlying its lending decisions to a new credit scoring joint venture, which will be partially owned by the state, the newspaper reported , citing two people familiar with the process.

State-backed companies are set to take a significant stake in Ant’s credit rating joint venture for the first time, three people told Reuters last week.

The partners plan to set up a personal credit rating company in which Ant and Zhejiang Tourism Investment Group Co Ltd will each own 35% of the business, while other state-backed partners Hangzhou Finance and Investment Group and Zhejiang Electronic Port will each hold slightly more than 5%, one of the people said.

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

In April, Chinese regulators asked Ant to do a comprehensive corporate overhaul, including turning Ant itself into a financial holding company and consolidating its two lucrative microcredit firms Jiebei and Huabei into the new company. consumer credit.

Chinese regulators have targeted Ant Group and other internet “platform” giants in a sweeping crackdown encompassing issues of antitrust and privacy, user data and crypto. currencies.

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