Ant Group has been ordered by Chinese regulators to “cut off” the “improper connections” between its payment platform and its financial products, in the first public comment on the fintech giant’s “rectification program” since its blockbuster public offering was shelved, reported the Financial Times.
The move could strip Ant down to a mobile payments platform, and severely weaken its credit businesses, said analysts. Only 36% of Ant’s revenues at present come from its payment services, with the remainder coming from digital finance.
“The plans will force Ant to completely restructure their business,” said Zhao Xijun, professor of finance at Renmin University of China. “Under the rectification plan, they will need to put walls among their different businesses, and each business shall be under the regulation of its specific industry. The impact could be huge.”