China’s draft payments rules put Ant, Tencent on notice – TechCrunch

A link to recent developments in China’s payment industry suggest that the duplex involved Ant Group and Tencent may find one.

Following Sudden stop of public sale of ant And instructions to the government Improve the firm’s business, Chinese officials sent another message this week indicating plans to curb the increasing concentration in the digital payments industry.

Group of Draft rulesTo regulate non-bank payments, and this week issued by the People’s Bank of China (PBOC), one third of the non-bank payment market with any non-bank payment processor or a combined half of the two companies. is. The market may be subject to regulatory warning from the anti-monopoly authority under the State Council.

Meanwhile, a single non-bank payment provider with more than half of the digital payment market or two-thirds of the market combined with two companies can be investigated to see if they constitute a monopoly.

Here is the difference between the two rules, focusing on the other. Digital payment As opposed to Non-bank payment At first.

Furthermore, the rules do not specify how executives measure an organization’s market share, saying whether a decision is based on an entity’s total transaction value, its transaction volume, or other metrics.

China processed more than half of China’s third-party payment transactions in the first quarter of 2020, according to this Market researcher iResearch, while Tencent handled about 40% of payments over the same period.

As China extends checks on its payment giants, this is also Financial markets open to international players. In December, Goldman Sachs moved to Take full ownership of your Chinese joint venture. This month, PayPal Become first The foreign company acquired 100% control of the payment business in China, and the remaining stake in its local payment partner Guofubao.

Industry experts told TechCrunch that PayPal is unlikely to go after the domestic payment giants, but instead could explore opportunities in cross-border payments, a market with established players like Extransfer, a team of ant veterans Was established by

Ant and Tencent also face competition from other Chinese Internet firms. Tickcock’s parent firm companies from food delivery platform Meituan, e-commerce platform Pinduoduo and JD.com Bitedance Have introduced their own e-wallets, though none of them pose an imminent threat to Alipay or WeChat Pay.

The comprehensive proposal from PBOC also defines how payment processors handle customer data. Non-bank payment services are for storing certain user information and transaction history and collaborating with the relevant authorities on data investigation. Companies are also required to obtain user consent and clarify to customers how their data is collected and used, a rule that reflects China’s broader effort Clamp down on unscrupulous data collection.