A plan is under discussion to allow the Chinese government to look into the personal information of 1 billion users of “Alipay,” China’s largest mobile payment platform.
The Wall Street Journal (WSJ) reported on the 23rd (local time) that “Ant Group,” which is effectively controlled by the founder of Chinese e-commerce company Alibaba, and a Chinese state-run company, are discussing ways to establish a credit rating agency. Ant Group is the parent company of Alipay and Alibaba.
The new corporation under the government, which will be launched as early as the third quarter of this year, is expected to take over some Alipay user data currently owned by Ant Group.
Alipay has accumulated data on the financial management habits of one billion people using financial services such as payments, loans and investments. As of June last year, Alipay’s cumulative payment amount exceeded 17 trillion dollars. And gave out loans to more than one-third of Chinese citizens.
China’s regulators are seeking to increase their influence on new credit rating corporations, WSJ said, citing negotiating officials.
The People’s Bank, China’s central bank, provides direct credit inquiry services, but lacks credit information for people who are not eligible for traditional bank loans. The new credit rating agency will allow the Chinese government to secure a large number of people’s credit information.
According to WSJ, AntGroup has resisted the Chinese government, which calls for data sharing, citing “no user consent”. However, Chinese authorities continued to press Ant Group last year by suspending its listing on the stock market and imposing a record 3 trillion won fine on Alibaba Group for alleged antitrust violations.
Eventually, Ant Group announced in April that it would reorganize itself into a financial holding company overseen by the People’s Bank of China. Earlier this month, state and private companies announced that they would set up a subsidiary that provides short-term consumer finance loans jointly invested.
Instead of the government’s strong influence, Ant Group’s independent business is shrinking. Ant Group established Tzuma Credit in 2015 based on Alipay’s performance. WSJ explained that it planned to operate a credit rating system across China, but that Tzuma Credit has now been reduced to the level of Alipay’s promotional program.
