Sending a strong signal that scrutiny is tightening for the country’s two major digital payment platforms, Tencent’s WeChat Pay and Ant Group’s Alipay, China’s central bank has unveiled draft rules for non-banking payment institutions.
The new rules come at a time when China is already taking steps to make anti-monopoly regulations tougher.
In fact, the draft rules unveiled on Wednesday had a mention of harsher regulatory measures against payment monopolies, the Global Times reported.
The People’s Bank of China (PBC), the country’s central bank, said in a statement that preventing financial risks in the payment arena is a key part of efforts to avoid systemic financial risks.
As per the rules, an overarching regulatory framework will be in place for the oversight of payment agencies and their business operations and affiliated transactions, said the report.
While Alipay and WeChat have led the digital payment revolution in China, the government is now closely monitoring their market dominance. The rules to be reviewed are the latest in a slew of antitrust efforts that the government is taking.
Alibaba Co-founder Jack Ma made some critical comments about China’s financial regulator in October 2020. Soon after that, Ma disappeared from public view, triggering speculation of him going “missing.”
Weeks after Ma made the critical comments, the flotation of his financial services firm Ant Group was canceled by the Chinese authorities.
Ma reappeared in public view after at least three months, according to reports this week.
According to US-based PitchBook that delivers data on private capital markets, Alibaba and its affiliates Alibaba Capital Partners and Ant Group (earlier known as Ant Financial) invested more than $2 billion in Indian companies since 2015.
Overall, in the last five years, Chinese investors (including Tencent) have poured in over $5.7 billion into the Indian start-up ecosystem, according to data from Venture Intelligence.