What: Alipay might lose the ability to instantly evaluate its customers’ credit history and rating.

Why it is important:  Such a move might prevent Alipay from keeping a leading edge on the exploitation of 1bn+ customers’ data, which might impact its attractiveness to customers in the future, at a moment when worldwide retailers have all started to accept Alipay as a payment method.

Alipay, the 1bn user financial app part of the Alibaba ecosystem, and its mother company, Ant, are still under the scrutiny of the authorities, after having already been ordered to separate the back end of their two lending businesses (credit card and loans), from the rest of its operations.

Beijing is now ordering Ant to separate all credit activities operations (credit card and loans) from the rest of its businesses, in order to create a credit scoring joint-venture which would be partly state-owned.

Lending activities represented 35% of Ant’s business in 2019, and 39% a year after.

A crucial consequence of such a separation would be that Alipay would not have direct access to any user’s credit history and rating, and would have to apply to the newly created joint-venture to do so, leading to longer processing time for the users and a reduced margin for Alipay.

Ant’s Alipay to break up under Beijing’s order