US digital money transfer platform PayPal has become the first third-party payment platform with 100 percent foreign ownership in China following its purchase of additional shares from local payment company GoPay.
PayPal Information Technology (Shanghai) on GoPay has increased from 70% to 100%, media reports said on Monday, citing data from the company's Tianyancha information website. Cofortune Information Technology Co has donated 30% of its shares to GoPay.
PayPal has made a move in recent years to enter China's largest digital payment market.
It completed its acquisition of 70 per cent budget by GoPay in December 2019, making PayPal the first foreign payment platform to provide online payment services in China. The transaction was approved by the People's Bank of China (PBC), the country's largest bank in September of that year.
As a company listed on the NASDAQ and the world’s leading third-party payment platform, PayPal covers more than 200 countries and regions worldwide, has more than 361 million active payment accounts and supports more than 100 million transactions worldwide.
GoPay, the capital of Beijing, founded in 2011, has licenses for advanced, online and cross-border yuan payment services.
In 2018, China's largest bank has announced it will open up the market to foreign digital payment firms, a move aimed at promoting competition in the retail industry. American payment and credit card companies were vying for access to the Chinese market.
In June last year, American Express announced that its Chinese subsidiary Express Company had received approval from PBC for its network cancellation license, becoming the first foreign payment network licensed to cancel Chinese currency transaction, the yuan, in mainland China.
Separately, Mastercard Inc gained approval in February 2020 to establish a card cancellation business in China.
China is ahead of the rest of the world in using mobile payments with about 47 percent of mobile phone users using mobile and digital wallets.
In 2018, the average third-party transaction from China was 167.83 trillion yuan ($ 25.9 trillion), up 59.7 percent year-on-year, according to reports. As expected, third-party mobile payments will enjoy a higher market share than the leading bank in 2021 and will remain at 58.1 percent by 2026, according to a report by the Reportlinker industry.