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ICBC restricts online payment biz

Industrial and Commercial Bank of China (ICBC) will restrict trade with Alibaba’s online payment arm to one branch. This is part of China’s latest crackdown on a nascent online finance industry. Alibaba Group’s payment arm, Alipay, previously had contracts with numerous branches of ICBC for negotiated corporate deposits, and could place deposits with the branch offering the highest yield. The move means ICBC branches will no longer compete to offer high yields on Alipay’s deposits, hitting the online payment business’s revenues from interest, and potentially setting a precedent for other banks to follow. The clash between entrenched interests in China’s traditional finance sector and its internet companies has escalated in recent weeks, with banks imposing limits on how much their customers can transfer to online finance services and the authorities looking into potentially heavy regulation. Though small, online and mobile payment transactions in China have been growing rapidly. The online payment market last year grew 47 percent to 5.37 trillion yuan ($869.20 billion) in transactions, according to Beijing-based consultancy iResearch.

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