PayPal acquired a 70% stake in Chinese company Gopay, becoming the first foreign company to acquire a payments license in China, according to the Financial Times.
The UK newspaper said China’s online payments market is currently dominated by Tencent, which runs WeChat Pay via its social-messaging platform, and Alibaba, whose payments affiliate Ant Financial owns Alipay.
It’s been a long time coming. PayPal had been “cautiously optimistic” it would receive a license to process payments in China back in 2012. As we noted at the time, PayPal enabled Chinese companies engaged in cross border trade, but it could not operate domestically in China.
TechCrunch said the terms of the new deal were not disclosed, and it also noted it comes at a time of increased tensions between the US and China. It published a statement from PayPal about the deal – the following is an excerpt:
“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.”