PayPal Becomes The First Foreign Payment Platform In China Description video: PayPal Becomes The First Foreign Payment Platform In China\nThe US financial firms have been aiming for the Chinese market for years, trying to secure a piece of this massive […]
PayPal Becomes The First Foreign Payment Platform In China
PayPal Becomes The First Foreign Payment Platform In China\nThe US financial firms have been aiming for the Chinese market for years, trying to secure a piece of this massive pie. The recent PayPal’s acquisition of GoPay is a great victory for this US-based payment provider, considering that they became the first foreign payment platform in China.\n\nThe Chinese financial market was untouched by foreign payment providers up until now. This gives PayPal an opportunity to leave a significant footprint and secure their spot in this rapidly growing financial market.\nPayPal’s GoPay Acquisition Leads Them into a New Market\n\nThe recent statement by Guofubao confirmed that PayPal has acquired 70% of equity state in GoPay through the Yinbaobao Information Technology Co., Ltd. Thus, they became the first foreign platform that provides online payment services in China.\nThe statement reads: “The People’s Bank of China has approved PayPal Information Technologies Co., Ltd.’s acquisition of a 70% equity interest in Guofubao Information Technology Co. (GoPay), Ltd., a holder of a payment business license in China. We are honored to become the first foreign payment platform to be licensed to provide online payment services in China. We look forward to partnering with China’s financial institutions and technology platforms, providing a more comprehensive set of payment solutions to businesses and consumers, both in China and globally. The transaction is expected to close in the fourth quarter of 2019 and is subject to customary closing conditions.”\n\nThe People’s Bank of China has approved this acquisition, opening a huge door for PayPal, which is now going to gain significant benefits from this lucrative market. GoPay provides both online and mobile transactions, primarily for e-commerce and aviation tourism industries.\nWhat’s interesting is that this acquisition came at a very strange time, during the increased tensions between the United States and China. With the White House considering curbing some US investments in China, it was unexpected to see PayPal entering their market so confidently.\n\nThe Benefits of Entering the Chinese Financial Market\n\nThere is no doubt that entering the Chinese financial market is a massive expansion for PayPal. This move will open up plenty of great opportunities, especially considering how rapidly the market is growing.\n\nChina’s payments market is expected to grow over 96 trillion dollars by 2023. PayPal now has an opportunity to tap into this goldmine and secure their piece of the pie.\n\nIt is also important to mention the increasing demand for e-commerce, which plays an important role in the Chinese financial market. With most e-commerce suppliers being situated in China, the market is benefiting from the large number of transactions taking place every single day.\n\nWith the demand for e-commerce growing consistently, there is plenty of room for the Chinese payment market to grow. On top of that, the number of active mobile payment users is expected to increase massively and reach 956 million by 2023.
PayPal became the first overseas company to own 100% of a payment service in China
PayPal Holding Inc has become the first foreign operator with 100% control of the payment platform in China, as the American fintech giant sees great prospects in the rapidly developing online payment market in the Middle Kingdom.
At the end of the year, PayPal acquired a 30% stake in the Chinese company GoPay, officially known as Guofubao Information Technology Co. At that time, she already owned 70% of the local operator’s securities. Financial details of the deal were not disclosed, but it is known that thanks to it PayPal becomes the first foreign company to obtain a license to provide online payment services in China.
Taking full control of one of the smaller players in the world’s largest payments market, PayPal will compete with local industry giants like Alipay, owned by Alibaba and WeChat Pay, controlled by Tencent Holdings Ltd, as China promotes opening your financial sector to foreign partners.
The share purchase also comes amid Beijing’s antitrust campaign against Alibaba Group Holding Ltd and other internet companies..
Last August, PayPal appointed Hannu Qiu head of Chinese business, responsible for developing long-term strategy in the world’s second largest economy. Qiu was the former head of the fintech division of OneConnect at insurance company Ping An Group, according to PayPal..
PayPal said in its 2019 annual report that its initial mission in China is to provide cross-border payment solutions to local entrepreneurs and consumers in order to connect the country’s commercial ecosystem with the global PayPal network..
However, in this area, PayPal also faces the prospect of competition from Chinese companies..
Bill Dan, CEO and Co-Founder of Shanghai-based payment platform Xtransfer, which provides international money transfers for Chinese entrepreneurs, spoke out about his ambitions for competitor PayPal.
«We see ourselves as Chinese PayPal in cross-border business», – Dan told Reuters.