Amid a crackdown on the Jack Ma-led Ant Group, reports suggest that the company's valuation may fall significantly. According to reports, as China undertakes fresh efforts to curb market concentration in the online payments market, the fintech giant might become worth less than 700 billion yuan ($108 billion). If the draft proposals are implemented, the company's Alipay service could reportedly have its value reduced by half.
Ma himself had disappeared from the public eye for some time, soon after he called for reform in China's regulatory system. It would appear that the administration did not much care for his comparison of the country's financial watchdog to a “pawnshop” regulator. Soon after this, the Chinese government had reportedly begun a “coordinated regulatory crackdown” on the Alibaba Group. Ma's recent reappearance in public via videoconferencing has alleviated the fears of many.
It is not just Ant Group's Alipay. The unveiling of draft rules for non-banking payment institutions. by China's central bank also sends a message to Tencent's WeChat Pay. The new rules come at a time when China is already taking steps to make anti-monopoly regulations tougher.
The rules to be reviewed are the latest in a slew of antitrust efforts that the government is taking. 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.
(With inputs from agencies)
