Daily Management Review

PayPal becomes first foreign company to enter Chinese payments market


PayPal Holdings Inc, the American payment system, will become the first foreign company of its kind to gain access to the PRC payment services market through the purchase of the local company Gopay Information Technology Co.

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The People’s Bank of China (PBC, the country's central bank) has allowed PayPal to acquire a 70% stake in Gopay. The latter has licenses for the provision of online payment and mobile transfer services in RMB, including cross-border, Gopay said in a statement. 

PayPal will acquire a stake in Gopay through its Chinese division.

The Chinese authorities, who promised to make their markets more open to foreign investors, have already taken a number of steps in this direction. In March 2018, the PBC opened the payment services market for foreigners, announcing that foreign companies will be able to apply for licenses for the provision of payment services, and the attitude towards them will be the same as for local companies.

Nevertheless, foreign payment services are in no hurry to come to China, since the payment services market in the country is oversaturated, Bloomberg writes.

Currently, Alipay and WeChat Pay are the leaders in the Chinese payment services market, where nearly 240 companies are represented.

The volume of this market for the period from 2013 to 2017 jumped by 9 times, up to 169 trillion yuan ($ 24 trillion).

source: bloomberg.com