Alipay is in big trouble! Huabei and Jiebei will be disconnected, and Yu'ebao will also be affected

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Since Ant Group's IPO was suspended, Alibaba has been in constant trouble.

As we all know, the case of Alibaba Group’s “choose one of two” has come to a conclusion some time ago. Alibaba’s behavior was directly characterized as “abuse of market dominance” and fined 18.2 billion! This also set a record for the largest fine issued since the implementation of China’s Anti-Monopoly Law.

However, for Alibaba, which is rich and powerful, this 18.2 billion is really nothing, accounting for only 4% of its domestic sales in 2019. Even so, the penalty was issued on Friday (April 10), but Alibaba's Hong Kong stock price opened higher and rose on the following Monday, once rising by more than 8%.

Soon, Ant Group was summoned again, and this time there was no fine, but it hit Alibaba's sore spot directly.

Look at who participated in this conversation: the People’s Bank of China, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, the State Administration of Foreign Exchange... basically all the rule makers in the financial field are gathered together. The content of the conversation is naturally aimed at Ant Group’s financial business, requiring it to make in-depth adjustments to it.

Please pay attention to two words, depth! It means that earth-shaking changes are coming!

What is the "depth" method? There are five rectification contents in total, which are relatively general. Zhiben Zhengqitong will sort them out for you according to my own understanding.

The first and most important one:

Correct unfair competition in payment services, give consumers more choices in payment methods, disconnect improper connections between Alipay and other financial products such as "Huabei" and "Jiebei", and correct violations such as nesting credit services in the payment chain.

The key to this sentence lies in the second half, which means that Huabei and Jiebei are both classified as nested credit businesses in Alipay, and you should clearly separate Alipay from them; while the first half explains the reason, which is to give consumers more choices.

In other words, when we use Alipay now, we all default to Ant’s own products, such as Huabei, Balance, etc. Even when paying, they will guide you to use Huabei installment or Jiebei without any agreement.

In the future, all of these may no longer work!

Instead, bank cards, credit cards (even WeChat Pay) and other payment methods are added, which means that Alipay should be equally covered. So can you imagine that when you shop on Taobao in the future, you can choose WeChat Pay or JD Baitiao when it comes to payment?

Article 2: Break the information monopoly, strictly implement the requirements of the "Regulations on the Administration of Credit Reporting Industry", operate personal credit reporting business in accordance with the law and with a license, collect and use personal information in accordance with the "legal, minimum and necessary" principles, and protect personal and national information security.

This is actually very easy to understand. It requires "driving with a license" and strict credit reporting for Huabei and Jiebei. In addition, Ant Group will not be able to collect user information without limits in the future.

Article 3: Ant Group as a whole shall be established as a financial holding company, and all institutions engaged in financial activities shall be included in the financial holding company for supervision, improve risk isolation measures, and standardize related transactions.

This is actually related to the listing of Ant Group.

We know that last year Ant Group deliberately changed its name from "Ant Financial Services Group" to "Ant Technology Group", removing its financial attributes and emphasizing its technological attributes. Why? One reason is that the supervision of technology companies is much looser than that of financial companies; the other reason is that the valuation of technology companies is high.

This regulation has completely overturned Ant Group's wishful thinking. Even if it can go public in the future, its valuation is expected to plummet.

Article 4: Strictly implement prudent regulatory requirements, improve corporate governance, earnestly rectify illegal credit, insurance, wealth management and other financial activities, and control high leverage and risk contagion.

This policy has actually already been implemented. For example, the sales channels of small and medium-sized banks and local banks on Internet platforms such as Alipay have been directly withdrawn.

Article 5: Control the liquidity risks of important fund products and actively reduce the balance of Yu'ebao.

This is also a very painful one.

We all know that Yu'ebao has a monopoly because it has more than 1 billion users of Alipay to divert their traffic. It is even more powerful than ordinary small banks, which has affected the country's control over money market funds.

What is pressure reduction? Zhiben Securities Futures understands that there are two main aspects: one is to require customers to no longer provide new subscription services, and the other is to require customers to redeem existing products.

All of these require Ant Group to take the initiative. In short, Yu'ebao may have to be limited in purchases in the future.

The above, especially the first one, is a bolt from the blue for Ant Group. After all, everyone uses Alipay for the convenience of using Huabei and Jiebei. Now that they are required to cut off, they are bound to lose a large number of users.

I also hope that this "anti-monopoly" board will not target Ant Group alone.