PayPal Now Holds 70 Pct. Stake In China’s GoPay

PayPal has acquired a 70 percent equity stake in Guofubao Information Technology (GoPay) and will head to China as their first foreign online-only payments platform, PayPal said in a press release on Thursday (Dec. 19).

“We’re pleased to complete this historic transaction, which enables us to broaden our participation in such a dynamic market,” said Dan Schulman, president and CEO, PayPal. “This important step will allow us to be a stronger partner to Chinese financial institutions and technology platforms. We look forward to contributing to the growth of China’s eCommerce and payments ecosystem.”

The acquisition was approved on Sept. 30 by the People’s Bank of China, according to reports. The terms of the deal were not disclosed.

GoPay is licensed for digital and mobile transactions and operates similar to PayPal. The payments space in China — the world’s largest eCommerce market — is currently dominated by locals like Alipay and WeChat Pay. China Internet Watch said online shoppers in China reached 370 million on desktop and over one billion unique mobile devices in September of 2019. “They use an average of 2.22 mobile apps and spend 6.3 hours on shopping,” its research showed. The top mobile apps in the third quarter of this year were WeChat, Alipay, QQ, Taobao and iQiyi.

Frost & Sullivan predicts that the mobile market will see extensive growth, hitting $96.73 trillion in 2023. It was $29.93 trillion in 2017. Cross-border transactions reached $6.66 trillion in 2016 and are expected to grow the most in verticals like eCommerce, travel and overseas education.

In November of 2018, American Express became the first overseas network to establish card-clearing services in China. Last year, China’s central bank agreed to expand the market to foreign payment companies, but approvals have been slow.

Central bank numbers in China illustrate the high level of growth in the field: Third-party online payments ballooned 45 percent last year to $29 trillion from just a year before.

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