(Image source: Photo.com)
On December 29, the People's Bank of China (PBoC) announced the disclosure of the permission for major changes in major events of non-bank payment institutions (as of December 2023), which showed that the PBOC agreed to change Alipay (China) Network Technology Co., Ltd. to no actual controller. This means that Alipay will no longer have a single actual controller from now on, but will be independently exercised by each major shareholder to vote on the shares it holds.
Image source: People's Bank of China website
The change stems from Ant Group's decision to adjust its voting power structure announced in early 2023, with Alibaba founder Jack Ma dropping from 53% to 6.2%. A year later, the PBOC approved the change of Alipay (China), a subsidiary of Ant Group, to no actual controller, marking the approval of Ant's equity rectification.
Before the adjustment, Jack Ma was the actual controller of Ant Group, and after the adjustment, the shareholders of Ant Group include major shareholders such as Hangzhou Junhan and Hangzhou Junao, and they independently exercise the voting rights of the shares held by Ant Group, and there is no concerted action relationship. Shareholders do not have control at the level of Ant Group's shareholders' meetings, and there is no situation in which the number of directors nominated by any shareholder exceeds half of all directors.
After the adjustment, Ant Group's shareholding structure
Although Alipay has no actual controller from now on, this does not mean that Alipay is ownerless. It still has a chairman and general manager who are responsible for the enterprise, but there is no single actual controller. The central bank's supervision of Alipay, on the other hand, also reduces the risk of capital overflow of Alipay users, making Alipay more secure.
In addition, affected by this, Ant Group's subsidiaries, including Hang Seng Electronics and Cathay Pacific Property & Casualty, have also changed to no actual controller.
Alipay is China's largest third-party payment platform, developed and operated by Ant Financial, a subsidiary of Alibaba Group. Users can make online payments, transfer money, pay utilities such as water, electricity and gas, purchase goods and services through Alipay. Alipay also provides financial services such as Yue Bao, Huabei, and MYbank, providing users with convenient financial management and payment experience. At the same time, Alipay also supports offline code payment, mobile phone NFC payment and other payment methods, becoming an indispensable payment tool in people's lives.
——Alipay: The first secured transaction model to solve the problem of transaction trust and create a traffic entrance
Alipay, as the first popular product, is a comprehensive traffic entrance, which diverts traffic to other financial businesses through high-frequency payment scenarios, and the main way to make profits is through handling fees and interest income from customer reserves.
While the explicit income comes from transaction service fees and interest income on customer reserves, it is relatively modest. More importantly, the hidden benefit, that is, the creation of a financial technology service entrance to attract traffic. As of June 2020, Alipay had 711 million monthly active users, with a total payment transaction size of 118 trillion yuan. This has virtually accumulated a large amount of customer, credit, and transaction data, enhanced customer stickiness, and continuously increased the activity rate, becoming the drainage entrance for daily life and digital finance, and realizing the secondary drainage to high-profit financial services.
-- Global third-party mobile payment competition landscape: Tencent and Alibaba have a combined market share of nearly 95%
The competitive landscape of third-party mobile payment in mainland China is basically stable, with Alipay and WeChat dominating the industry, with a combined market share of more than 90%. According to Analysys data, in 2020, WeChat and Alipay had a market share of 94.4% in the third-party mobile payment sector.
Alipay's change to "no actual controller" will make Alipay more stable in its future development and will also provide users with safer financial services. At the same time, it also marks the continuous improvement and strengthening of China's financial supervision, providing a more solid guarantee for the healthy development of the entire financial market.
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