PayPal Holding has become the first foreign company with full control of payment business in China. The U.S. fintech firm PayPal aims to strengthen its foothold in a fast-growing market for online payments.
PayPal acquired the remaining 30% stake in China’s GoPay in December 2020, according to the National Enterprise Credit Information Publicity System data. However, the financial information wasn’t revealed in the data.
PayPal purchased the 30% stake a year after it acquired a 70% equity stake in GoPay for an undisclosed amount. With the acquisition, PayPal becomes the first foreign firm to provide online payment services in China.
GoPay, formally known as Guofubao Information Technology, offers both online and mobile transactions. It provides payment products for industries such as e-commerce, cross-border commerce, and tourism. GoPay payment gateway enables merchants to accept payments directly on their websites when people are shopping online. Over 11 thousand online merchants accept payments with GoPay and thousands of people use GoPay every day.
After taking full control of China’s GoPay, PayPal will have to compete with Chinese payment companies such as Tencent Holdings’ WeChat and Alipay which is owned by Alibaba-affiliated Ant Group
The acquisition comes at the time when China launched an investigation into alleged monopolistic practices at Alibaba Group Holding and other Internet companies.
In August 2020, PayPal appointed Hannah Qiu as chief executive officer of China business, responsible for forming and implementing PayPal’s long-term development strategy in China. Qiu was a former co-general manager and chief innovation officer at insurer Ping An Group’s fintech unit OneConnect Financial Technology.
PayPal has been planning to provide cross-border payment solutions to Chinese merchants and consumers since 2019. It is focusing to link China’s e-commerce and payment ecosystem to PayPal’s vast payments networks.
Bill Deng, CEO of a payment platform start-up XTransfer, said that XTransfer already provides cross-border money transfers for Chinese merchants and is not willing to emulate PayPal.
He also told Reuters that “We see ourselves as China’s PayPal in cross-border businesses.”