US-based PayPal just became the first overseas payments firm to enter China’s payments services market after The People’s Bank of China approved the company’s acquisition of a 70% equity stake in Guofubao Information Technology (GoPay).
PayPal made the acquisition through a subsidiary in Shanghai, Yinbaobao Information Technology, according to a statement from GoPay. Financial details of the deal, however, were not disclosed.
GoPay is a joint venture of China International Electronic Commerce Center (CIECC) of the Ministry of Commerce and HNA Retailing Holding. According to the statement, it has licenses for mobile, online, and cross-border yuan payment services.
The deal is expected to close in the fourth quarter of this year, subject to customary closing conditions, PayPal said.
The US giant is entering China’s still burgeoning payments market. According to a recent report by Statista, the total transaction value in the country’s digital payments segment amounts to about USD 1.6 trillion in 2019, and it’s expected to almost double to USD 3.1 trillion in 2023.
The growth will be driven by digital commerce, which accumulated a total transaction value of USD 988.8 billion in 2019.
Major players in the space include e-wallet providers Alipay and WeChat Pay.
Earlier this year, it was reported that Alipay had 4 million users in the US. The company also said that the app can be used for in-store payments at 7,000 locations across the country. Overseas payments are also available in 40 countries and regions around the world.
Alipay parent Ant Financial has also been investing in a series of overseas online payments services, particularly in fast-growing markets across South and Southeast Asia.
This article first appeared on Tech in Asia.