As the governing Communist Party seeks to reign in the “unruly growth” of the internet titans, Chinese officials have demanded major adjustments to Alipay, the country’s largest payment app. The Financial Times reported Monday that Alipay, which has over one billion users in China and other Asian countries like India, has been instructed to split off its successful micro-lending business.
Currently, customers may pay using a standard credit card connected to their bank or take out modest unsecured loans to buy anything from toilet paper to computers.
“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.”
Ant Group, Alipay’s parent business, is China’s largest payment services provider.
After founder Jack Ma criticized officials for limiting innovation, regulators halted the fintech conglomerate’s record $37 billion stock market debut in November.
Ma’s corporate empire has been targeted as part of a broader assault on internet businesses aiming at dissolving monopolies and improving data security, which has slashed company values by billions of dollars.
Since the crackdown began, the outspoken billionaire has mainly been kept out of the spotlight.
Alipay will have to pass over customer data used to make lending choices to a new credit score joint-venture that is partly state-owned after splitting its payment and loan operations, according to two individuals familiar with the arrangement.
Alipay did not immediately reply to AFP’s inquiries about the order’s impact on its operations.
At a conference on Monday, Zhao Zhiguo, a spokesperson for the Ministry of Industry and Information Technology, claimed that regulators had urged Ma’s e-commerce platform Alibaba and other internet businesses to cease restricting access to competing services.