PayPal CEO John Donahoe recently said it soon hopes to obtain a payment license in China, but much uncertainty remains.
From IT News:
Donahoe sees “encouraging signs” from the Chinese authorities, but said it remained next-to-impossible to guess when its fast-growing PayPal unit would finally get the green light to operate in the world’s second largest economy.
PayPal entered China in 2005, but has since struggled to gain traction among consumers. Local competitors dominate the country’s payment market. And the situation worsened for PayPal after the central bank required all non-bank payment service providers to obtain a license starting in 2011. The government has yet to issue a license to a foreign-owned company. Though the central bank has not ordered those without a license to close immediately, the uncertainty has certainly hurt.
“I am confident that PayPal will be the first non-domestic company to get a payments licence in China. That could be in three months or five years,” said Donahoe.
It is not clear whether PayPal will have to do this through a joint venture with a domestic company in which it owns a minority 49 percent stake, or whether it will be able to own a majority stake, Donahoe added.
At the end of2012, PayPal’s market share in China is minimal at less than 2%, with local players such as AliPay and Tenpay dominating.
Click here to read more from IT News.