PayPal has received the green light to acquire a majority stake in the local payments platform, GoPay. With this approval from the People’s Bank of China (PBOC), PayPal has become the first foreign payment platform to enter the Chinese market.
According to the statement from GoPay, PayPal will acquire a 70% controlling stake in the company through one of its subsidiaries called Yinbaobao based in Shanghai. With this move, PayPal will compete with the likes of local payment platforms such as Ant Financial’s Alipay and Tencent’s WeChat Pay, both of which are extremely popular in China. GoPay has licenses to carry out online as well as mobile transactions.
Although this approval from PBOC may come as off as surprising to many given the recent trade war, it is in line with the statement made by China’s central bank last year. The central bank said that it will open up China’s payments market to foreign companies to improve competition. In this regard, American Express was approved to set up card-clearing services in China late last year.
PayPal is yet to disclose the terms of the deal. But it said that the deal is expected to close by Q4 2019.