Alipay app started as mere payment app but expanded its branches to different segments namely credit, asset management and insurance. But the growth in payment business is slowing as banks’ inefficiency in penetrating large section of the retail and small businesses market is becoming more and more of a problem.
Ant taking over consumer loan market
Alipay began consumer lending in 2014
- Now identifies and assesses borrowers, but passes them on to banks which extend the loans
- Collects a technology service fee
- Takes cut of 40% of loan interest by taking almost no credit risk
- Only 2% of loans are on its balance sheet
Third and Fourth Leg of the Ant
Asset Management
- Merchants or shoppers with cash in Alipay could get small return by parking it in a money market fund.
- Later Ant broadened its offerings turning it into China’s most powerful distribution channel for investments.
- Insurance
- Partnering with insurance firms, Ant is collecting fees as a distribution platform.
Regulatory Landscape
Ant has been facing regulatory hurdles as the regulators deem such dominance of Ant threatening
