Following U.S. digital money transfer platform PayPal’s acquisition of Chinese licensed payment company GoPay in 2019, PayPal made another move to hold the full equity of GoPay today, according to local media 21st Century Business Herald.
On Aug. 17, 2020, PayPal embarked on a journey to the East and announced that it had appointed Qiu Han as CEO of PayPal China. In September 2019, PayPal obtained Beijing’s approval to buy a controlling stake in GoPay, in which the firm has sold a 70% stake to PayPal. China’s central bank announced in 2019 that this move would openly promote competition in the retail payments industry.
Gopay has licenses for mobile, online and cross-border yuan payment services, while PayPal will make the acquisition through a subsidiary in Shanghai, per PayPal’s statement in 2019.
On Jan. 11, 2021, according to 21st Century Business Herald, Gopay’s equity status has changed. PayPal’s subsidiary Paypal Information Technology Shanghai (美银宝信息技术上海有限公司) took over the shares held by GoPay, making PayPal the first foreign payment company to own a domestic payment license.
In China, digital payment giants like Alipay and WeChat Pay have significant influence over the market, making it hard for PayPal to survive in a foreign country. Many Chinese social media users opposed PayPal’s move in China, saying, “If America bans TikTok, we don’t welcome a foreign payment app then.”
If PayPal were to localize in China, challenges stand. However, opportunities lie with providing foreign visitors in China with a familiar way to make purchases.