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Beijing, Sep 13 (AFP): 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.
\nAlipay — 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.<\/p>\n
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.<\/p>\n
“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.”<\/p>\n
Alipay’s parent company Ant Group is China’s biggest payments services provider.<\/p>\n
Regulators pulled the plug on the fintech conglomerate’s record $37 billion stock market launch in November, after founder Jack Ma criticised officials for stifling innovation.<\/p>\n
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.<\/p>\n
The outspoken billionaire has largely remained out of the limelight since the crackdown began.<\/p>\n
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.<\/p>\n
Alipay did not immediately respond to AFP’s questions on how the order would affect its business.<\/p>\n
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.<\/p>\n
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 services.<\/p>\n
“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.<\/p>\n
“Users have responded strongly against this.”<\/p>\n
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