PayPal Holdings has now revealed that it can do business in China after buying a controlling stake in a domestic payments firm.
The deal would make the Paypal the first foreign firm to enter the China payment services market.
“The People’s Bank of China has approved PayPal Information Technologies Co., Ltd.’s acquisition of a 70 percent equity interest in Guofubao Information Technology Co. (GoPay), Ltd., a holder of a payment business license in China,” Dan Schulman, president and CEO of PayPal, said in a statement. “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.”
GoPay has a license for the mobiles, online and crosses border renminbi payment services. According to the report, PayPal will make an acquisition with a subsidiary in Shanghai. No financial terms were disclosed.
This plan has also reportedly been in the works for a while. At the time of trade talks, the US has been trying to convince China to allow its more market access, and the central bank revealed that it was going to allow for “equal treatment” for the foreign and domestic groups alike. Among the companies that have been trying since the year 2017 to get access are Mastercard and Visa.
This new deal will even allow PayPal to provide a wide range of services which includes the issuing of debit cards and cross border renminbi payment, both the mobile and online. The company will now also be in direct competition with the two major Chinese Companies: Alibaba and Tencent.