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China to split Alipay’s lending business

Beijing plans to dismantle the Alipay super-app in order to create a new app for the lending activities of the company’s more than one billion users, according to a Financial Times report.

That would make the restructuring the most visible to date for the giant as China aims to crack down on monopoly tech behavior.

Previously, Chinese regulators had ordered Ant to separate the rear end of its lending business, Huabei and Jiebei. Huabei is similar to a traditional credit card while Jiebei works on small unsecured loans.

Officials want these apps, which have already been separated from Alipay’s usual financial offerings, to be split into a stand-alone app. The plan would also require Ant to turn over the user data underlying its lending decisions to a credit rating joint venture, which will be partly owned by the state. Ant struggled to control the new joint venture with regulators, and a compromise was reached in June that state-owned enterprises in the home province, including the Zhejiang Tourism Investment Group, had a controlling stake.

The move could have the effect of dampening the lending activity of Ant, which had seen tremendous growth from both Huabei and Jiebei to fuel its IPO plans last year, which ultimately failed. place.

The new business will also apply for a consumer credit scoring license, which Ant has long wanted. The Chinese central bank has not been generous with the licenses, and all those it has issued have gone to state-run operations. This prevented Ant from monetizing the data she collected on Chinese citizens.

The envisaged plan would see Ant lose its ability to independently assess the creditworthiness of borrowers. Future users could have their requests routed to a joint venture credit rating company where the credit profile is held, and then sent to the Huabei and Jiebei loan app to issue the credit.

PYMNTS wrote about plans to start a new credit rating company in June, saying it could move forward before the end of the year.

Read more: Ant Group May Share Data With China Via Credit Rating Partnership



On: Forty-seven percent of U.S. consumers avoid digital-only banks due to data security concerns, despite considerable interest in these services. In Digital Banking: The Brewing Battle For Where We Will Bank, PYMNTS surveyed over 2,200 consumers to reveal how digital-only banks can boost privacy and security while providing convenient services to meet this unmet demand.

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