Beijing (PingWest)- China’s central bank has proposed antitrust rule for online payment platforms in the non-bank industry, which include Ant Group’s Alipay and Tencent’s WeChat Pay.
Under draft rules proposed on Wednesday, non-bank provider which deal with half of the total online transactions, or two entities with a combined two-third share, can be subject to antitrust investigations.
According to a report issued by iResearch, China has so far issued license to 233 service providers.
Non-bank payment service providers must also comply with the central bank’s anti-money laundering and anti-terrorism requirements. If any platform break the terms , the central bank can withdraw the player’s licence under the new rules.
The central bank did not define how it would measure the market share for nonbank third-party payments. AliPay, operated by Ant Group, had 55.4 per cent of total online transaction in China for mobile payments as of June 2020, while WeChat Pay had 38.5 per cent, according to data compiled by Analysys.
The proposed rules, which are available to public feedback until February 19, come at the time when the Chinese government has been placing tight scrutiny on the financial activities of Chinese tech giants amid growing concern over the systematic financial risks associate with their financial products.
On November 3, regulators summoned Ant Group to meet, which has resulted in suspension of Ant’s record-breaking IPO. Then, Chinese regulators summoned Ant Group in December for another regulatory meeting, in which Chinese regulators urged Ant to rectify illegal financial activities in its credit, insurance and wealth management businesses.
Regulators have also investigated a number of other fin-tech products on the market, leading to companies including Ant and Ten-cent to remove many online deposit products from their platforms in December.