China plans to break up Ant's Alipay

Ant will not be China's only online lender affected by the new rules, according to a report. PHOTO: REUTERS

BEIJING (REUTERS) - Beijing wants to break up Alipay, the hugely popular payments app owned by billionaire Jack Ma's Ant Group, and create a separate app for the company's highly profitable loans business, the Financial Times reported on Sunday.

The plan will also see Ant turn over the user data that underpins its lending decisions to a new credit scoring joint venture, which will be partly state-owned, the newspaper reported, citing two sources familiar with the process.

State-backed firms are set to take a sizeable stake in Ant's credit scoring joint venture for the first time, three sources told Reuters last week.

The partners plan to establish a personal credit scoring firm wherein Ant and Zhejiang Tourism Investment Group will each own 35 per cent of the venture, while other state-backed partners, Hangzhou Finance and Investment Group and Zhejiang Electronic Port, will each hold slightly more than 5 per cent, said one of the sources.

According to the FT report, Ant will not be China's only online lender affected by the new rules. The company did not immediately respond to a Reuters' request for a comment.

In April, Chinese regulators asked Ant to conduct a sweeping business overhaul, include turning Ant itself into a financial holding firm, and fold its two lucrative micro-loan businesses Jiebei and Huabei, into the new consumer finance firm.

The Chinese regulatory authorities have been targeting Ant Group and other Internet "platform" giants in a wide-ranging crackdown encompassing antitrust and privacy issues, user data and cryptocurrencies.

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