An attempt by the largest payments platform in China, Ant Financial, an affiliate of Alibaba Group Holding Ltd (NYSE:BABA) to introduce a social media function has turned into an embarrassment after being abused by certain users. A few hours after unveiling the social network feature, racy pictures of young women were posted asking for money. Lucy Peng, Ant Financial’s executive chairman was hours later forced to apologize.
After the embarrassing incident, the payments firm promised that the offensive pictures would be removed and the account owners banned from the service permanently. This was revealed in a memo that Peng sent to the company’s employees.
“We apologize to all the Alipay users and partners who have entrusted us. Our teams will hold internal discussion to think clearly and put in writing what we want and don’t want,” said Peng in the memo.
Fierce competition
The incident ignited debate over whether Alipay exceeded limits in a bid to win the popularity contest over its rivals such as WeChat, a subsidiary of Tencent Holdings Ltd (HKG:0700). Earlier in the year, WeChat found itself on the receiving end when it introduced a similar feature. At the time, users could upload photos which were then automatically blurred and in order for other users to view them, they had to send digital money for the blur effect to be removed.
In Alipay’s case, it restricted certain features to users who had a favorable credit score as they were the only ones allowed to comment and send cash rewards if they liked the pictures. The credit score restriction has since then been removed and most of the sector-related circles are open only to those who have been invited.
Damage unknown
Though it was still too early to determine how much damage has been caused to the brand, Ant Financial’s executive chairman was quick to lament the occurrence. The payment system has over 100 million users who use it on a daily basis. The company has also diversified into wealth management and credit scoring. Ant Financial was previously known as Zhejiang Ant Small & Micro Financial Services Group. It’s currently valued at $75 billion.
