The People's Bank of China has authorized the takeover of PayPal over GoPay, allowing the US firm to become the first foreign payment company in China. PayPal will acquire 70% of the Chinese company's shares through the purchase of its Shanghai-based subsidiary Yinbabao.
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With the acquisition, the Western payment company will enter a market that is today dominated by Alipay (Ant Financial) and WeChat Pay (Tencent). As Gizmo China points out, GoPay has licenses to promote online payments as well as transactions via mobile devices.
Still according to the publication, the Chinese central bank's approval of the deal may be considered unusual and even surprising given the current political situation. After all, China is participating in a fiscal war with the United States, where PayPal is based.
"The People's Bank of China takes advantage of the acquisition of 70% of Guofubao Information Technology Co. (GoPay), a Chinese payments business company, by PayPal Information Technologies. We are honored to become the first foreign payment platform to have the license to provide online payment services in China. "
PayPal Official Announcement
Even so, the ruling is in line with a statement issued by the People's Bank of China in late 2018. At the time, a spokesman for the bank said the country would open its payments market to foreign companies with the aim of improving competitiveness.
This has already been shown with the authorization by the American firm American Express to implement a credit card clearing services system in China last year.
GoPay is known for providing product payment services to certain industries, including e-commerce, cross-border commerce and aviation tourism, among other markets.
PayPal has not yet revealed the details of the deal, but it has been said that it will be finalized by the fourth quarter of 2019.