PayPal’s 70% equity acquisition in Guofubao Information Technology Company (GoPay) has been approved by The People’s Bank of China. It will now be the first foreign payment platform in China.
According to a statement from GoPay, PayPal acquired GoPay stake through its subsidiary company based in Shangai, Yinbaobao Information Technology.
The acquisition comes amid the increased tension between the US and China as the Whitehouse has been considering stopping all US investments in China due to trade disputes between the two countries.
China’s payment market is led by a few local players namely; AliPay and WeChatPay. There proves to be more room for the market to grow, a good opportunity for PayPal to benefit from.
According to a report from Frost and Sullivan, China’s mobile payment market is expected to grow by 21.8% from 2017 to about $96.73 trillion in 2023. This will be attributed to the increasing demand for e-commerce.
The market has had increasing cross-border transactions over the period in various sectors such as travel, e-commerce, and overseas education and reached $6.6 trillion in 2016.
China’s Central Bank stated that PayPal acquisition would open up further to foreign payments companies. Paypal announced that the transaction is expected to close in the 4th quarter of 2019 subject to customary closing conditions.