This brief posting comes from Reuters and announces that PayPal has bought the remaining 30% of the Chinese payments firm GoPay, which is one of the smaller ones of its kind in China, where online payments are ubiquitous.
Since PayPal had already bought 70% of GoPay last year and is licensed for online payments in China, it does not seem all that significant. Readers will continue to wonder, however, why the credit card companies are still having a hard time getting processing approvals in China (with the exception of Amex, which has strings attached anyway) and that this transaction was allowed to go through seemingly easily.
‘Financial details weren’t disclosed in the data. The stake purchase came a year after PayPal bought a 70% stake in GoPay for an undisclosed amount，then becoming the first foreign company licensed to provide online payment services in China…PayPal declined to comment….In taking full control of one of the smaller players in the world’s largest payment market, PayPal will compete with domestic payments giants Alipay, owned by Alibaba-affiliated Ant Group, and WeChat Pay, owned by Tencent Holdings Ltd, as China fully opens up its financial sector.’
Things are rarely if ever transparent in China, so one can only speculate as to what the real terms of the deal are but some of those may become more apparent over time. The article does mention the recent seeming crackdown on the tech giant Alibaba (not to mention that Jack Ma has not been heard from in months), so some messaging may be involved. However, getting back to practical matters, what PayPal did say is that its target is cross-border payments, connecting Chinese merchants to its broader global network.
‘Last August, PayPal appointed Hannah Qiu as head of China business, responsible for formulating long-term strategy in the world’s second-biggest economy. Qiu was a former executive at insurer Ping An Group’s fintech unit OneConnect, according to PayPal’s website…PayPal said in its 2019 annual report its initial focus in China is to provide cross-border payment solutions to Chinese merchants and consumers, linking the country’s commerce ecosystem to PayPal’s global network.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group