![]() Yet on Wednesday, Chinese officials led by Vice Premier Liu He vowed to stabilize financial markets, promising to ease a regulatory crackdown, support property and technology companies and stimulate the economy. Officials have handed out billions of dollars in antitrust fines to end the domination of a few heavyweights as President Xi Jinping pushes for more “common prosperity.” More than a year after the Chinese government snuffed out the biggest initial public offering in history by Ant, Beijing’s crackdown has snowballed into an assault on every corner of China’s technosphere. Yet the services are supervised by different business groups - unlike Ant, which consolidates all of its fintech operations into a single entity.įor instance, the payments business straddles two units including WeChat, the instant messaging app, and the fintech unit that provides the back-end infrastructure under the leadership of the corporate development group. Tencent’s fintech and business division - which includes cloud computing – is its fastest growth engine, contributing roughly 30% of its total sales, the biggest revenue source after gaming. Tencent’s complex web of internal connections could complicate its separation from the rest of the company. Tencent management including Chief Strategy Officer James Mitchell stressed during the company’s May earnings call that their bread-and-butter in the finance business was payments, which has lower risks.īut WeChat Pay is at the heart of the social media giant’s businesses, handling an estimated 40% of China’s mobile payments as of 2021, second only to Alipay. Executives have said such a move should have minimal impact on operations. The requests on Tencent are similar to those imposed on Ant, which regulators said earlier this month has yet to complete its own overhaul. to a meeting, requiring them to restructure their financial wings into holding companies and sever “improper links” between their existing payments services and financial products. ![]() In April 2021, regulators summoned 13 firms including Tencent, Meituan and ByteDance Ltd. Tencent representatives declined to comment. ![]() The People’s Bank of China didn’t immediately respond to a request seeking comment. Regulators considered Tencent’s current payments license owned by its TenPay unit, the back-end provider of wallet services on WeChat and QQ, as insufficient to cover WeChat Pay’s services, the people said. Tencent is expected to maintain control of the new finance arm but one question is whether services accessed through WeChat must in future offer equal ease of access to Ant’s rival Alipay. The Wall Street Journal reported this week that Tencent faces a record fine after Chinese authorities found WeChat Pay had violated anti-money laundering rules. One certainty is that a financial holding company would mean additional capital requirements and tighter regulatory scrutiny. The mechanics of ring-fencing Tencent’s financial business - including interoperability between different platforms - still need to be ironed out and arrangements could change, the people said.
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