China’s Fintech Giants Face Heavy Fines as Regulatory Crackdown Concludes

China’s regulatory crackdown on the fintech industry, which began in late 2020, is reaching its conclusion as the country imposes substantial fines on its two leading digital payments giants.

Tencent, along with its payments subsidiary Tenpay, disclosed in a filing on Friday that it has been fined approximately 2.99 billion yuan ($410 million) by the People’s Bank of China for past regulatory breaches related to payment services in mainland China.

On the same day, the central bank announced a staggering 7.123 billion yuan (roughly $1 billion) fine on Ant Group, the fintech affiliate of Alibaba, for a range of illegal activities. These activities encompassed corporate governance, consumer protection, banking and insurance, payments and settlement, anti-money laundering practices, and fund sales.

Alibaba and Tencent, with their respective payment platforms, hold a duopoly in China’s digital payments market, and they offer a wide array of financial services.

China’s clampdown on fintech forms part of its broader efforts to rein in the growing power of its technology sector and subject it to increased regulatory scrutiny in rapidly emerging fields. In late 2020, China halted Ant’s initial public offering, which would have been the largest IPO in history at that time.

Since then, Ant has undergone a substantial restructuring that significantly diminishes the company’s overall influence on consumer finance. Jack Ma has reportedly relinquished control of the fintech empire, and most notably, Ant’s primary offerings are now subject to regulations that typically target traditional financial services.

Read more: TechCrunch