technology

China splits Ant Group’s Alipay and orders creation of new loans app

China splits Ant Group’s Alipay and orders creation of new loans app
China splits Ant Group’s Alipay and orders creation of new loans app

The Government of China has reportedly ordered the split up of Alipay, the massively popular payments app belonging to business tycoon Jack Ma's Ant Group, and the creation of a separate new app for the company's extremely profitable loans business.

According to two sources that are familiar with the matter, the proposal also calls for Ant to hand over the user data that underpins the company’s lending decision to a novel credit score JV, which would be partially government-owned, according to.

As per other credible sources, state-backed businesses are likely to acquire a sizable stake in the company’s credit scoring joint venture for the first time.

The partners supposedly intend to set up a personal credit scoring company in which Zhejiang Tourism Investment Group and Ant will each hold 35% of the JV, while government-backed partners, Zhejiang Electronic Port, and Hangzhou Finance & Investment Group, will each hold a little more than 5%.

Meanwhile, in April, Chinese regulators also ordered Ant to perform an overall business overhaul, which included transforming Ant itself into a financial holding company, and merging two of its profitable microloan units, Huabei and Jiebei, into a new consumer finance company.

Apparently, Ant is not the only online lender in China that has been impacted by the new regulations. Chinese regulators have been pursuing Ant Group and other Internet platform behemoths in a wide-ranging investigation that includes antitrust and privacy concerns, user data, and cryptocurrencies.

After the news came out, Hong Kong-listed shares of Alibaba, Ant Group's e-commerce venture, dropped more than 4% during trading on Monday.

The drop also impacted the larger Chinese tech industry, with the Hang Seng Tech index down more than 2% and shares of many other Chinese technology giants trading in Hong Kong falling. Tencent dropped 2.45% at the closing, while Meituan dropped 4.47%.

Source credit: https://www.straitstimes.com/business/banking/china-plans-to-break-up-ants-alipay

About the author

Sunil Jha

Sunil Jha has been a part of the content industry for close to two years. Having previously worked as a voice over artist and sportswriter, he now focuses on writing articles for newsorigins.com, across a slew of topics, ranging from technology to trade and finance. With a business-oriented educational background, Sunil brings forth the expertise of deep-dive research and a strategic approach in his write ups.