The US PayPal will compete with two major payment companies like Alipay and WeChat Pay
PayPal, a company based in the United States, has just become the first foreign payment company to enter the Chinese market. This is confirmed by the People’s Bank of China, which approved the acquisition by the US company of a 70% shareholding in Guofubao Information Technology (GoPay).
PayPal made the acquisition through a subsidiary in Shanghai, Yinbaobao Information Technology. The financial details of the agreement, however, were not disclosed. GoPay is a joint venture between China International Electronic Commerce Center (CIECC) of the Ministry of Commerce and HNA Retailing Holding. According to preliminary information, it has mobile, online and cross-border yuan payment service licenses.
In 2019 the value of transactions for digital payments in China amounts to about $ 1.6 trillion
The deal is expected to end in the fourth quarter of this year, subject to customary closing conditions, said PayPal, which is entering the burgeoning payment market in China.
According to a recent report, the total value of transactions in the country’s digital payments segment amounts to about $ 1.6 trillion in 2019 and is expected to double to around $ 3.1 trillion in 2023. Growth will be driven by digital trade, which has accumulated a total transaction value of $ 988.8 billion in 2019. The main players in the segment are the Alipay and WeChat Pay e-wallet providers.
The real rival will be Alipay, which can count on 4 million users in the USA
Earlier this year, it was reported that Alipay could count on 4 million users in the United States. The company has also stated that the app can be used for in-store payments at 7,000 locations across the country. Payments abroad, on the other hand, are available in 40 countries and regions of the world.
The parent company Alipay Ant Financial has also invested in a series of online payment services abroad, particularly in rapidly growing markets throughout southern and south-east Asia.