Fresh off its acquisition of Honey, PayPal has successfully closed the deal with China’s online payment service provider GoPay.
The People’s Bank of China approved PayPal’s acquisition of a 70% equity interest in GoPay last September, while the deal was finalized on Dec. 19.
This makes PayPal the first-ever foreign company to provide online payment services in the country.
Terms of the acquisition have not been disclosed.
“We’re pleased to complete this historic transaction, which enables us to broaden our participation in such a dynamic market. 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 e-commerce and payments ecosystem.” – Dan Schulman, President and CEO, PayPal
Growth Opportunities in China’s Payment Market
PayPal’s investment in GoPay was a wise, not to mention timely, move as Chinese consumers are increasingly opting for cashless transactions.
A recent report from eMarketer shows that more than half of China’s population will utilize mobile payment platforms in 2020, which could rise to 60.5% in 2023.
Schulman said obtaining license to provide online payments services in China gives PayPal the potential to expand its total addressable market and long-term growth prospects.
In the company’s third-quarter earnings call with financial analysts, Schulman also described the acquisition as an opportunity for PayPal to expand its relationships with existing partners like China Union Pay and AliExpress, as well as build new partnerships.
He added that the company’s initial focus is on providing cross-border payment solutions to China’s merchants and consumers.
Perhaps, there could be no better course of action, especially considering the rapid growth of digital payments worldwide.
How soon will PayPal outpace China’s local players?
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