The People's Bank of China (PBOC) will continue to crack down on mainland payment companies' practices that fall afoul of the country's anti-monopoly law, with a senior central bank official pointing out that billionaire Jack Ma's Ant Group was not singled out for such behaviour.
"Ant Group is not the only company that engages in monopolistic behaviour, while in fact there are other payment companies in China with similar misconduct issues," Fan Yifei, deputy governor of PBOC, said during a media briefing on Thursday.
While Fan did not name any companies, he said that the actions taken against Ant Group would also be taken against other payment platforms engaging in malpractice, adding that "the central bank continues to support the payment industry to grow faster and better, but at the same time we would also crack down on any misconduct or malpractice in the sector".
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The mobile payments market is dominated by two service providers – Alipay of Ant Group and WeChat Pay of Tencent Holdings. Other Chinese hi-tech firms competing in the online payments market include video-sharing company Douyin, e-commerce giant Pinduoduo, on-demand delivery market leader Meituan and ride-hailing services provider Didi Chuxing.
Fan Yifei, deputy governor of the People's Bank of China. Photo: Simon Song alt=Fan Yifei, deputy governor of the People's Bank of China. Photo: Simon Song
WeChat Pay operator Tencent and food delivery firm Meituan did not reply to requests for comment.
The PBOC's pledge to clean up the payment industry's malpractices comes just two days after the State Council, China's cabinet, said late on Tuesday that it would undertake a sweeping overhaul of its regulations on how companies raised capital, both domestically and overseas.
"The central bank's widening crack down on malpractices of online payment companies may slow down their development in the near term, but it will help China to develop its fintech market in a healthy and orderly manner," said Gordon Tsui, chairman of Hong Kong Securities Association. "It will create a fair market and enhance customer protection."
The central bank and other financial regulators in April directed Ant to correct improper competitive behaviour surrounding its mobile payment platform Alipay and urged it to enhance users' data protection. Ant then said it would place all of its financial-related activities in a holding company overseen by Beijing-based watchdogs and also create a licensed personal credit reporting company as part of its efforts to strengthen the protection of users' data.
In the same month, another watchdog, the State Administration for Market Regulation, slapped Alibaba Group Holding with a 18.2 billion yuan (US$2.8 billion) fine for violating the country's anti-monopoly law. Alibaba owns a stake in Ant and owns this newspaper.
China in February issued new antitrust guidelines targeting internet platforms, creating an important tool for Beijing to crack down on monopolistic practices such as forcing merchants to choose only one online channel or charging different prices for clients.
China's top financial regulators in April also summoned 13 of the country's technology companies that run online financial businesses, including Tencent and Tik Tok-owner ByteDance, and told them to step up anti-monopoly measures and to halt "the disorderly expansion of capital".
Ant called off its mega initial public offering in Hong Kong and Shanghai in November last year after China's regulators introduced a number of regulatory reforms for payment companies and other financial firms that use technology and big data to provide financial services, which may pose a systemic risk to the country's financial system and breach consumers' privacy.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved.
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