Monopoly money

21 January 2021 By Pete Sweeney, Robyn Mak Follow @petesweeneypro

The central bank has defined payments dominance in market-share terms, squarely targeting Ant and Tencent. Its new draft rules also separate transactions from interest-bearing products. That will complicate cross-selling more profitable services, and deter new competitors.

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The People’s Bank of China on Jan. 20 released new guidelines defining a digital payments monopoly as any non-bank service provider with at least half the market for online transactions, or any two with a combined two-thirds share. Surpassing the threshold would make the company subject to antitrust investigations.

Three providers with three-quarters of the market also would set off an antitrust alarm, according to the draft rules. Having less than 10% market share in a business with two or three dominant companies would not trigger an antitrust investigation, the central bank said.

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