Thu, Jan 21, 2021 – 3:34 PM
[HONG KONG] The future of China’s financial super-apps has been thrown into question. The central bank is defining unhealthy dominance in specific market-share terms, while emphasising the separation of digital payments from interest-bearing accounts. That complicates efforts to cross-sell more profitable financial services and threatens Ant and Tencent’s business models.
Following Beijing’s abrupt crackdown on financial technology last year that derailed Ant’s US$37 billion initial public offering, the People’s Bank of China (PBOC) on Wednesday spelled out its competition concerns more precisely.
If a non-bank operator controls over half a market, it will be subject to further scrutiny. Similar guidelines apply if two or three companies dominate. China has over 200 licensed payments providers, but Ant’s Alipay and Tencent’s Tenpay divide most of the non-bank online transactions between them. Under the new rules, they will be exposed to further regulatory action.