Alipay: Alibaba shares fall after report says Beijing wants to break popular payment app

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But this was not the only news that caused the stock to fall. Investors are also concerned that Beijing is stepping up its ongoing crackdown on big technologies, after regulators ordered Internet companies. including Alibaba and Tencent – Stop blocking rivals’ links to their platforms.

Alibaba (BABA) fell as much as 7% in Hong Kong, before cutting losses 4.2% at the close. Shares lost 46% since early November 2020, when Chinese regulators stopped Ant Group’s giant IPO at the last minute, wiping out about $ 380 billion of Alibaba’s market value. Ant Group split from Jack Ma’s Alibaba in 2011. Alibaba still owns a third of the fintech technology company.
Since its IPO, regulators have already ordered Ant to restructure as a financial holding company, and now his superapp — Alipay — may be next in line. According to the Financial Times, China wants to break Alipay and create a standalone app for its lending business.

“Chinese regulators have already ordered Ant to separate the back of its two loan businesses, Huabei, which is similar to a traditional credit card, and Jiebei, which makes small unsecured loans, from the rest of its offerings. financial and to bring in external shareholders, “the newspaper said.

“Now officials want the two companies to split into an independent app as well,” he added, citing unnamed sources.

Regulators also want Ant to hand over user data that underpins its lending decisions to a new credit score joint venture that will be partially state-owned, according to the report.

Ant and the People’s Bank of China did not immediately respond to a request for comment.

Alipay, the digital payments app, has more than 700 million active users each month. But while it has not been controlled over the past decade, authorities are increasingly aware of the influence the technology industry has on the country’s economy. Ant, for example, controls more than half of the mobile payments market in China.

No more blocking

On Monday, China’s Ministry of Industry and Information Technology ordered the country’s Internet companies to end a long-term practice of blocking rivals ’links to their platforms. The ministry said it will punish those who did not correct their actions within an unspecified time. It did not specify the punishments.

The comments made at a press conference came after a state-run newspaper reported on Saturday that the ministry met with a handful of internet companies last week to discuss the issue.
Aside from Alibaba, other Chinese technology stocks also fell sharply, following ministry comments. Meituan lost 4.5% i Tencent (TCEHY) fell 2.4%.

– CNN’s Beijing office contributed to this article.

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