PayPal has manged to fend off serious competition and achieve what no other foreign company has been able to do to date becoming the first foreign operator with 100% control of a payment platform in China.
PayPal wins Chinese payments race with full ownership of payment business
PayPal acquired the 30% stake it doesn’t already own in China’s GoPay, formally known as Guofubao Information Technology, on December 31, 2020, according to shareholder data from the National Enterprise Credit Information Publicity System.
Financial details weren’t disclosed in the data. The stake purchase came a year after it bought a 70% stake in GoPay for an undisclosed amount, then becoming the first foreign company licensed to provide online payment services in China.
In taking full control of one of the smaller players in the world’s largest payment market, PayPal will compete with domestic payments giants Alipay, and WeChat Pay, as China fully opens up its financial sector.
The stake purchase also comes amid Beijing’s anti-monopoly campaign against Alibaba and other Internet companies.
PayPal said in its 2019 annual report its initial focus in China is to provide cross-border payment solutions to Chinese merchants and consumers, linking the country’s commerce ecosystem to it’s global network. But in that area, it also faces the prospect of competition from Chinese companies.
Bill Deng, Chief Executive and co-founder of XTransfer, a Shanghai-based payment platform start-up that facilitates cross-border money transfers for Chinese merchants, was not shy about his ambitions to emulate PayPal. “We see ourselves as China’s PayPal in cross-border businesses,” Deng said.
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