Online Deposit Products from Fintech Giants Pulled, Regulation Continues to Tighten

JD Digits, Lufax, Baidu and many Chinese fintech giants have removed their interest-bearing online time deposit products after Alipay pulled its internet deposit product on Dec. 18, due to regulators’ increasingly strict rules. 

Beijing Business Today earlier reported that Alipay, one of the biggest e-payment platforms, has canceled the entry of its online deposit product interface. Alipay stated that the removal complies with the regulatory requirements for the entire internet deposit industry. Currently, users who have purchased the product are still granted access to the interface. 

Several fintech companies followed Ant Group’s adjustment, announcing the removal of their online deposit products, including Tencent-backed Tenpay, Trip.com Finance, JD Digits, Didi Financial, and Lufax. 

SEE ALSO: China’s Fintech Giant Ant Group Wins Approval From Top Securities Regulator for HK IPO

Similar to Ant Group, JD Digits has suspended its platform from allowing new online deposit users to purchase related products and has set to make “steady and orderly” adjustments to existing customers and businesses, leaving the related products solely visible to users who have bought them. 

Meanwhile, Lufax said it has stopped updating its existing products and halted launching new ones while the purchased products remain unaffected. The company said it will pay close attention to the regulations. 

Trip.com Finance and Tenpay have also cleared all of their online deposit products. 

Ever since Ant Group, Alipay’s parent, was suspended from its historical Hong Kong and Shanghai IPO and Jack Ma was summoned for talks with authorities, the ever-accelerating Chinese fintech industry has been facing increasing scrutiny. 

Officials have given such signals multiple times in recent months. On Nov. 13, Tianqi Sun, director of the Financial Stability Bureau of the People’s Bank of China, released an article titled Online Platform Deposits, A Product Case Study for Digital Finance and Financial Supervision, proposing the various problems as well as risks associated with Internet deposits, such as high returns and low thresholds for customers. 

Also, Sun pointed out eight hotspot problems in online deposits along with seven management measures in his speech at the 4th China Internet Finance Forum on Dec. 15, where he also highlighted other instances of illegal financial activities in this budding industry. 

Ant Group chairman Eric Jing also delivered a keynote speech at the forum, breaking the silence as the first senior Ant executive to make a public appearance after the IPO suspension. Jing agreed with the importance of market regulation and said that Ant Group is doing its utmost to deal with the aftermath of the suspension under regulators’ guidance.