The Central Bank of the Communist Party of China (CPC) issued payment regulations for Alipay and other institutions.
On January 20, Jack Ma, the de facto controller of Ant Group, made his first public appearance after nearly three months. On the same day, the Central Bank of the Communist Party of China issued payment regulations for Alipay and other institutions, and mentioned the word anti-monopoly for the first Time, implying that the payment market will start to be reshuffled.
On January 20, RTHK time, several Chinese mainland media learned from Alibaba Group that that morning, Jack Ma met with 100 rural teachers across the country via video link and delivered a speech in which he said, “When the Epidemic is over, we’ll meet again!”
Subsequently, the Ali Group intranet also released an article – “La Ba Festival and the teachers have an appointment Ma teachers to come to the appointment”.
When Jack Ma attended this event to address, he did not mention about the progress of the disposal of the Ant Group, the content mainly to the award ceremony within the award-winning teachers to thank, and said the Foundation heard many teachers’ stories in the country, he thanked the teachers for their efforts and contributions.
Ma said: “During this time, my colleagues and I have been learning and thinking, and we are more determined to devote ourselves to the idea of Education for the public good. This is not only because I myself come from a teacher background, but more importantly, education, especially rural education, is of great relevance.”
In accordance with the usual practice, this year’s Ma Yun Rural Teacher Award, also awarded to 100 rural teachers.
This is the first time Ma disappeared in public for nearly three months.
And in the afternoon of Jan. 20, the Communist Party’s central bank’s heavy-handed regulations on payment institutions were released.
The official website of the CPC Central Bank published the Regulations on Non-Bank Payment Institutions (Draft for Comments) (hereinafter referred to as “Regulations”). The Regulations contain six chapters and seventy-five articles, which strengthen corporate governance requirements and implement all-round and whole-process supervision; mention for the first time anti-monopoly regulatory measures in the payment field, clearly define the scope of the relevant market and the criteria for determining market dominance; and penalize licensed institutions for providing payment business channels to institutions operating payment business without a license, etc.
The official capital requirements for payment institutions are determined: the minimum registered capital of non-bank payment institutions is 100 million yuan (RMB, same below).
Among the conditions for major shareholders, controlling shareholders and beneficial owners, it is mentioned that the same legal person may not hold more than 10% of the equity of two or more non-bank payment institutions, and the same beneficial owner may not control two or more non-bank payment institutions. And this also means that, in the case of already owning a payment license, according to the new rules, it will not be possible to acquire another payment license subsequently.
Su Xiaorui, a senior expert in the financial technology industry, pointed out that this article will impose higher requirements on the giant’s acquisition of third-party payment licenses, as there is no way to acquire more payment licenses by acquiring a larger number of them.
In fact, since 2015, the Communist Party’s central bank has started to control the market access of payment institutions, so many financial companies have acquired third-party payment licenses by way of mergers and acquisitions.
In the view of analysts, the Regulation marks a tougher regulatory phase for China’s non-bank payment sector, while the official proposal of anti-monopoly in the payment sector will have a far-reaching impact on the whole market.
As clearly stipulated in Article 55 of the Regulations, if the market share of one non-bank payment institution in the non-bank payment service market reaches one-third, or the combined market share of two non-bank payment institutions in the non-bank payment service market reaches one-half, or the combined market share of three non-bank payment institutions in the non-bank payment service market reaches three-fifths, as long as one of the aforementioned circumstances is involved, the Central Bank can alert the anti-monopoly enforcement agency of the State Council to take measures such as interviewing them. As well as take measures such as stopping the abuse of dominant market position, stopping the implementation of concentration, and splitting non-bank payment institutions according to the type of payment business.
Currently, Alipay, WeChat Pay (Tencent Financial) and UnionPay Commerce, under the control of Ma Yun’s Ant Group, are the top three with market shares of 48.44%, 33.59% and 7.19% respectively, and the combined market share of the three reaches 89.21%, which is a high degree of industry concentration.
This indicates that Alipay will be hit the hardest, followed by WeChat Pay and other institutions.
According to Beijing Business News on Jan. 20, Huang Dazhi, a senior researcher at Suning Financial Research Institute, said, “The impact of this on the non-bank payment market will be very big. Because from the current non-bank payment market, the market share of the head two institutions has exceeded the two-thirds standard line set by regulation.”
Previously, China’s financial regulator had an interview with Ant Group, which involved the payment business, requiring a return to the origin of payments, improved transparency of transactions and a strict ban on unfair competition.
It is foreseeable that the future pattern of China’s payment market will see certain changes.
According to Huang Dazhi, the current payment industry is an extremely concentrated market, and after strengthening anti-monopoly and exceeding the standard line set by regulation, institutions will either split up or cede their original market share.
Recent Comments