Several firms suspend cooperation over alleged rising costs
Alipay, the leading third-party online payment platform in China, said Thursday that it does not charge fund companies too much after several firms suspended their cooperation with the platform citing rising payment costs.
A batch of fund companies such as E Fund Management, Bosera Asset Management and HFT Investment Management have suspended their cooperation with Alipay from Tuesday and Wednesday, forbidding investors to buy some of their fund products through the leading online payment platform.
Only HFT Investment Management said the move was due to "the rising payment costs," according to its statement released Tuesday, while the other fund companies did not specify the reason in their separate statements.
Alipay said in a statement on Thursday that it had adopted a different way of charging services fees to fund companies, which was changed from charging based on the total amount of the fund products to charging based on money flows generated from the subscription or redemption of fund products.
"The adjustment aims to make the charging mode more simple and transparent, and it has actually lowered fund companies' payment costs," the statement said.
Alipay further noted that after the adjustment, its services charges on equity funds were just half the previous level and also lower than the industry's average level, but did not elaborate on the effect on monetary and bond funds.
Some fund companies suspended cooperation with Alipay on monetary and bond fund products, but are still continuing cooperation on equity funds, according to Alipay.
The statement was echoed by a customer service staff member from E Fund Management.
The staff, who did not give his name, told the Global Times Thursday the company only suspended Alipay's purchasing channel on its monetary and bond funds.
Alipay also assured its users in the statement that it will not charge them any services fees.
"Charging by traffic is a common way in the Internet industry, but this controversy shows that the mode has met some resistance in traditional industries such as the finance sector," Li Chao, an industry analyst from Beijing-based consultancy iResearch, told the Global Times on Thursday.
"The new method will weigh on fund companies' profitability, especially on monetary and bond funds with thin profits," a fund industry expert, who declined to be named, told the Global Times Thursday.
Alipay has partnered with fund firms to sell their products through its platform since 2013 as part of its efforts to expand business in the finance sector.
"Alipay has taken a hard line this time given its leading status in the industry, with the aim of cashing in on its services," the expert said. "But the move is likely to drive some of its users to other platforms."
Fund companies such as E Fund Management still cooperate with Internet giant Tencent Holdings' payment platform Tenpay, which is considered a major rival of Alipay.
Others said Alipay's move is aimed at protecting the interest of its own monetary fund Yu'ebao, operated by Tianhong Asset Management Co.
Alipay wants to drive its users to invest in Yu'ebao rather than other monetary or bond funds, as its parent company Ant Financial now has a 51 percent stake in Tianhong, Southern Metropolis Daily reported Thursday, citing an unnamed executive with a third-party payment firm.
