The governments approach to prevent a “winner-takes-all” approach, is to limit companies from processing more than 30% of total payments transactions. It joins Indian fintech company Paytm and US players like Google Pay, Walmart’s PhonePe, and Amazon Pay. Facebook-owned WhatsApp has just been given the go-ahead to deploy its new payments service. The country is one of the world’s fastest-growing ecommerce markets and is increasingly attracting interest from global ecommerce giants. India is also setting the antitrust agendaĪntitrust regulations are being explored worldwide to rein in Big Tech – India is another example of an emerging economy setting the agenda for antitrust. Ant’s consequent lack of compliance at the last minute led the IPO to be suspended. In early November 2020, two days before Alibaba affiliate Ant Group was due to raise $35bn through an IPO, the Chinese government imposed new regulations on Alibaba and Ant Group. The government has demonstrated that it is willing to take a hard stance against China’s technology giants. Under the new regulations, larger platforms may be forced to open up and share data to their rivals with the aim to create a level playing field for China’s fintech industry. For its part, Alibaba has blocked shoppers from using WeChat Pay on its Taobao and Tmall sites. Similarly, Tencent’s WeChat messaging app does not allow users to share content from Douyin or click links that would take them to products on Alibaba’s ecommerce site Taobao. The new regulation aims to stop anticompetitive practices such as those used by Alibaba and Tencent in the “pick one of two” tactic, which forces sellers to sell exclusively on their platforms. Now the Chinese government views these companies as too powerful, too independent, and potentially a systemic risk to the Chinese financial system. Light touch banking regulations enabled Alibaba and Tencent to grow into vast and ubiquitous online financial services businesses. China’s government intervention could aid ByteDance The new antitrust measures, which for the first time directly tackle anti-competitive behaviour in the internet sector, have the potential to reshape the digital payments market in favor of new entrants. However, ByteDance is seizing the opportunity to enter the digital payments space at a time when Chinese regulators are tightening their grip on powerful tech companies. The digital payments market in China is currently dominated by Alipay and WeChat Pay, a duopoly making up over 90% of the market. The service is called Douyin Pay and will allow the company to use its platform of 600 million daily users to grow its ecommerce presence. ByteDance – the company behind the popular video-sharing app TikTok – has this week launched a third-party payment service for Douyin, the Chinese version of TikTok.
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