Today, the People’s Bank of China approved PayPal’s acquisition of a 70% equity state in GoPay (Guofubao Information Technology Co., Ltd.). Thus, once this deal is over, it will make PayPal the first foreign payment platform in the Chinese market. GoPay has licenses for online and mobile transactions. It mainly provides payment products for e-commerce, cross-border commerce, aviation tourism, etc.
The company’s full statement on the acquisition is below:
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.
The statement clarifies that PayPal acquired the controlling stake through the Shanghai-based subsidiary, Yinbaobao Information Technology (Shanghai) Co., Ltd. However, none of the sides disclose the deal details.
This news wouldn’t make a stir if there is no issue between the US and China. But we know The White House is considering curbing some American investments in China.
Will PayPal Succeed In China?
However, China’s online payments market today is mainly led by local companies that include AliPay and WeChat Pay on the mobile side. On the other hand, this doesn’t mean other players can’t enter this market and succeed. We mean there’s still plenty of room for it to grow, and PayPal’s entrance will change a lot.
As for the mobile payments, the experts have predicted it will grow by 21.8% from 2017 and reach $96.73 trillion in 2023. Moreover, the total number of active mobile payment customers should reach 956 million by 2023, up from 562 million in 2017.