PayPal Holding Inc., is an American company that provides online payments system that supports online money transfers and serves as an electronic alternative to checks and money orders.
Most famous as the payment processor for many online vendors and auction sites in many countries around the world, the company has become the world's first foreign company with a 100% control of a payment platform in China, that according to Chinese government data.
It started back in 2019, when PayPal annual report said that its initial focus in China was to provide cross-border payment solutions to Chinese merchants and consumers, linking the country’s commerce ecosystem to PayPal’s global network.
But in that area, PayPal needed to compete with Chinese companies.
To do this, also in 2019, PayPal bought 70% stake in GoPay (国付宝), or formally known as Guofubao Information Technology Co. for an undisclosed amount. At that time and with People’s Bank of China (PBOC), PayPal was the first foreign-invested company licensed to provide online payment services in China.
And this time, PayPal acquired the remaining 30% stake it didn't already owned in China's GoPay.
The deal that was finalized on December 31, 2020, marks the U.S. fintech giant expansion to the East, as it eyes for a bigger foothold in a booming market for online payments.
By taking full control of GoPay, which is at this time considered a small player in the world’s largest payment market, PayPal is competing with domestic payments that are much more powerful, like Alipay, owned by Alibaba-affiliated Ant Group, and WeChat Pay, owned by Tencent Holdings Ltd..
PayPal shares closed nearly 3% higher at $244.90 and gained 0.42% in the after-hours session.
It should be noted that in August 2020, PayPal appointed Hannah Qiu as its head of China business, responsible for formulating long-term strategy in country.
Qiu has had extensive experience in the Chinese fintech sector, having first joined Ping An Group in April 2014, where she served first as general manager of its tech data platform and subsequently as general manager of credit agency Qianhai Credit (前海征信).
She was a former executive at insurer Ping An Group’s fintech unit OneConnect, according to PayPal’s website.
The purchase came amid Beijing’s anti-monopoly campaign against Jack Ma-founded Alibaba Group Holding Ltd and other internet companies.
The Chinese conglomerate giant also suffered a setback in the U.S. after outgoing President Donald Trump banned transactions through its Alipay app.
Read: China Starts Investigating Jack Ma's Monopolistic Alibaba And Ant Business