Ant’s consumer lending business is made up of two products: Huabei (similar to a traditional credit card), and Jiebei (small unsecured loans). Users say they are funnelled towards these two products with discounts and offers, and sometimes Alipay uses Huabei to pay by default, even if they do not intend to use credit.
Lu Lindi became an avid online shopper during China’s coronavirus lockdown earlier this year, using the Alipay app on his smartphone to pay for everything from milk powder to Chinese medicine. But the 54-year-old did not realise for weeks that instead of debiting his account, Alipay was actually funding his shopping spree by issuing him credit. Mr Lu was not alone. Alipay’s credit business is so huge that it now issues about one-tenth of all of China’s non-mortgage consumer loans. And a number of other customers told the Financial Times they felt the app is designed so that people take out loans, sometimes unwittingly. As Alipay’s owner, Ant Group, approaches a $30bn IPO in Hong Kong and Shanghai, the rapid growth of its credit business has been a key selling point to investors.