According to Reuters, China's antitrust authority is considering an investigation of Alipay and WeChat Pay at the initiative of the central bank, which claims the digital payment giants have used their dominant positions to suppress competitors.
The People's Bank of China has officially recommended that the State Council Committee consider antitrust issues that were posed by the country's non-bank payment companies in the second quarter, one source said. Alipay and WeChat Pay, which allow scanning code payments, have become ubiquitous in everyday life in China, and nowadays, many people in this country rarely use cash. The estimates suggest that Alipay has 55% of the market, while Tencent's fintech business, most of which is WeChat Pay, has 39%.
The Antitrust Committee of the State Council has been collecting information on Alipay, owned by Ant Group - an affiliate of the Alibaba Group Holding Ltd, as well as collecting information on WeChat Pay, owned by Tencent Holdings Ltd, for over a month.
The competition authorities will likely try to decrease their dominance in order to encourage smaller companies to enter the market. Furthermore last year, the central bank as announced its plans to standardize QR code payments interoperability, which is another measure aimed at lowering the barriers to entry to the market and stimulating competition in the digital payments sector.
The State Council Information Bureau, central bank, Ant and Tencent did not respond to requests for comment regarding the potential investigation.