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The First Foreign Company In China To Fully Own A Payments Business Is PayPal

The First Foreign Company In China To Fully Own A Payments Business Is PayPal
The first foreign company in China to own a 100 per cent control of a payment platform in the country is Holding Inc, according to data available from the Chinese government.
This is a boost to the aim of the United States based fintech giant to make larger inroads into the booming Chinese market of digital payments.
Aaccording to shareholder data from the National Enterprise Credit Information Publicity System, 30 per cent stake in China’s GoPay, formally known as Guofubao Information Technology Co.
No financial details of the deal were disclosed in the data. It was about a year ago that a 70 per cent stake in GoPay was acquired for an undisclosed amount by PayPal. The most recent purchase of the remaining stocks of the company made PayPal the first foreign company that is licensed to offer its online payment services and products to customers in the Chinese market.
No comments from PayPal were available in the media.
Now having taken complete control over one of the smaller players in an online payments market that is the largest in the world, it would be possible for PayPal to rival the domestic Chinese payments giants such as Alipay, owned by Alibaba-affiliated Ant Group, and the Tencent Holdings Ltd owned WeChat Pay. Chinese authorities had previously announced its intention to open up its financial sector to foreign firms earlier.
This development for PayPal also comes at a very interesting time as Chinese financial regulators are tightening scrutiny of the monopolistic business strategies of Alibaba Group Holding Ltd and other Internet companies.
Hannah Qiu was appointed as the head of its China business by PayPal in last August with the responsibility of formulating long-term strategy for the company in the second largest economy of the world. According to PayPal’s website, Qiu was a former executive at insurer Ping An Group’s fintech unit OneConnect.
Offering cross-border payment solutions to Chinese merchants and consumers that would link the commerce ecosystem of the country to the global network of PayPal, would be the initial focus of the company in China, PayPal said in its 2019 annual report.
But it is most likely that competition from Chinese companies will provide strong competition to PayPal in that area.
Emulating the services being planned to be offered by PayPal in China is something that its Chinese rivals will not be shy to do.
“We see ourselves as China’s PayPal in cross-border businesses,” said Bill Deng, the Chief Executive and co-founder of XTransfer, a Shanghai-based payment platform start-up that offers services that facilitate cross border money transfers on behalf of Chinese merchants.

Christopher J. Mitchell

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