Jack Ma’s fintech startup shakes up China’s banks
By Stella Yifan
It handled more payments last year than Mastercard, controls the world’s largest money-market fund and has made loans to tens of millions of people. Its online payments platform completed more than $8 trillion of transactions last year — the equivalent of more than twice Germany’s gross domestic product.
Ant Financial Services Group, founded by Chinese billionaire Jack Ma, has become the world’s biggest financial-technology firm, driving innovations that let people use their phones for buying insurance as easily as groceries, enabling millions to go weeks at a time without using physical cash.
That success is also putting a target on the company’s back. China, even more than the U.S., is now under pressure to reckon with the disruptive power of a financial-technology giant.
China’s banks complain Ant siphons away their deposits, causing them to pay higher interest rates, and is a factor leading them to close branches and ATMs. One commentator at a state-owned television channel described Ant’s huge money-market fund as “a vampire sucking blood from banks.”
Chinese authorities, clearly increasingly uncomfortable about Ant’s scale, have started to put limits on the activities it can pursue. Earlier this year, China’s central bank undermined a years-long effort by Ant to build a national credit-scoring system. The bank effectively prevented Ant’s system from being used by institutions making loans.