Beijing steps on Alibaba's Ant Group by forcing it to submit to same regulation as banks

China has again cracked down on Alibaba, this time by ordering its fintech arm Ant Group to become a financial holding company that is subject to tighter regulations. Chinese regulators met with Ant Group on April 12 to lay out required business changes inspired by Beijing’s concern that technology firms acting as finance …

[alain williams]

Time to apply the duck test

to Paypal, Apple pay & Google pay. If they act like a bank they should be subject to bank type rules.

Opening up to competition is also good.

I am often critical of the Chinese - but very much approve of this.

[Martin Gregorie]

Re: Time to apply the duck test

I agree with the general view that all elements of the financial sector must play by a common set of rules, but disagree that payment services should be treated like banks, because they aren't banks: they don't hold monetary amounts except for the short time they are in transit through the payment system, don't pay interest or service debt.

The better model to follow is that of existing funds transfer services, e.g S.W.I.F.T. and SEPA internationally, or CHAPS, FASTPAY and BACS in the UK, which are all designed to securely handle financial transfers between accounts at any pair of member banks.

[michaeltse123]

Re: Time to apply the duck test

ant is taking and poolimg peoples money and providing loans which in turn creates money based on future interest. Just like a bank does and therefore needs same regulation. Otherwise it will cause another 2008 with lots of bad loans.

[Yet Another Anonymous coward]

Re: Time to apply the duck test

Paypal and Alipay are definitely banks.

Income gets paid into them, they hold it and will let you withdraw it.

They will also decide to lock your account with no notice, cancel your account because an algorithm makes a mistake and confiscate all your money fro breaking some vague 'terms and conditions'.

They also have no insurance, no regulatory oversight and often no way of contacting them.

[Falmari]

Re: Time to apply the duck test

@YAAC "Paypal and Alipay are definitely banks." I agree and Apple pay & Google pay don't fall into definition.

But this quote from the article "Other Beijing-directed changes include a requirement to open its near-ubiquitous Alipay payment app to competitors" would be nice if Apple pay & Google pay were forced to do that.

[Yet Another Anonymous coward]

Re: Time to apply the duck test

>would be nice if Apple pay & Google pay were forced to do that.

But forcing open free and fare competition in the market place is capitalist.

No way is that going to happen, Apple and Google pay too much to the parties to have to face the market.

[Gene Cash]

Re: Time to apply the duck test

> they don't hold monetary amounts except for the short time they are in transit through the payment system

Tell that to anyone that's had Paypal lock their accounts... and that's a LOT of people.

[vtcodger]

Re: Time to apply the duck test

I was going to say much the same thing. As I understand it, PayPal is already treated like a bank in Europe. Now China as well?

Not being willing to hand over my financial details to an unregulated bank (and especially one with a long standing reputation for high-handed conduct) I don't use PayPal. That's kind of a problem as most North American vendors seem to believe that nothing could possibly go wrong as long as PayPal is available and not too expensive.

I realize that China bashing is the motif dejure, but perhaps we Americans could lease a few Chinese regulators for a while. Maybe we could pretend they are Japanese or slightly odd looking Italian consultants.

[Anonymous Coward]

"slightly odd looking Italian consultants"

"Nice bank you got there ... be shame if anything were happen to it"