Chinese regulators have told fintech teams to solve “problems”

Chinese officials have told the country’s 13 largest technology companies to “correct significant problems” on their platforms, a sign that the regulatory pressure on the fintech sector is spreading beyond Jack Ma’s Ant Group.

Fencech affiliates of Tencent, ByteDance and Baidu, JD.com, Meituan and Didi were in a group called to meet with officials from the People’s Bank of China and other banks, securities and foreign exchange regulators, according to the Xinhua State News Agency.

Ant Group, this was it restructuring order this month, he was not called again.

While praising the “overall positive” development of the fintech sector in recent years, regulators denounced anti-competitive practices and harming consumers.

Officials asked the platforms to increase their capital to cover 30% of the loans they offer along with the banks, after similar changes were introduced in Ant. The measures were agreed upon final instructions issued to the broad fintech sector.

Analysts have warned that the rules would increase the costs of financing larger financing companies and significantly reduce the sector. But they added that some smaller players can enjoy it more opportunity to expand.

Regulators said the “inadequate link” between payment services and other financial services should be broken. This meant that payment platforms were prevented from aggressively promoting loans, cutting off an important advertising channel for companies.

Officials also called for increased transaction transparency. Compared to the state’s traditional banking sector, mobile payment platforms such as Tencent’s WeChat Pay, Ant’s biggest competitor, share much less transaction data with the government.

Companies must also apply for licenses to report personal loans to “break data monopolies”. Only two agencies run by the government have these licenses, and it was not clear what requirements the government would have for private companies to issue licenses.

Regulators also called for platforms to improve financial risk management when making loans and investments.

Shares of Chinese technology groups trading in Hong Kong fell on Friday morning. Meituan fell 3.1 percent, Tencent 1.4 percent and JD.com 2.8 percent.

Regulators stop The Ant Group forecast an initial public offering of $ 37 billion last year, which would be the largest public listing ever in the world. Jack Ma, the founder of Ant and one of China’s best-known activists, has largely disappeared from view since he was removed from the list.

It seems that it is now Beijing extending the study To other Chinese technology companies, which have increasingly ventured into financial products.

WeChat Pay and Alipay, Ant’s payment app, were launched as a way for users to purchase goods and services, but have become platforms that offer loans, investments and insurance.

JD.com, an online retailer, also has a consumer credit arm, and in 2019 Didi launched crowdfunding and loan products.