With the acquisition of GoPay, PayPal will become the first foreign firm to enter China’s digital payments market.
The People’s Bank of China has approved the acquisition of a 70-percent stake in Guofubao Information Technology Co. (GoPay) by Yinbaobao, a local subsidiary of payments platform PayPal, GoPay announced in a statement earlier this week.
Foreign players have found it tough to break into China’s digital payment space to compete with local giants, though Beijing has promised to open up this market. With the acquisition, PayPal will be the first foreign firm to receive an online payments license in China, ahead of the likes of Visa and Mastercard, who have yet to get their licenses approved.
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, PayPal CEO Dan Schulman said in a statement posted on its website, adding that the deal is expected to be finalized by the end of the year.
GoPay, founded in 2011, is a joint venture between the China International Commerce Center (CIECC) and HNA Retailing Holding, a subsidiary of HNA Group.