The American digital payment firm has now acquired a 70 percent equity stake.
PayPal has now confirmed the completion of its GoPay acquisition. The American firm purchased a 70 percent equity stake in the Chinese Guofubao Information Technology company.
This represents the first time a foreign payments platform will provide online pay services in China.
Through the GoPay acquisition, PayPal will become the first company from outside of China to offer online payment services within the country. The purchase in the majority stake in the company didn’t come as a surprise. Back on September 30, the People’s Bank of China first approved the transaction. This has now closed. That said, the details regarding the deal have not yet been disclosed.
GoPay is a firm that carries licenses in China for both online and mobile payments transactions. It primarily provides payment products for cross-border commerce, tourism, e0commerce and other industries.
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The GoPay acquisition opens up a tremendous market to PayPal, which had not previously been available.
GoPay is comparable to PayPal in that it makes it possible for merchants to accept payments online through their websites. The mobile payment market in China is currently led by local firms. These include AliPay, WeChat Pay and other eWallet providers. This means that there is space for PayPal to step in from outside and flourish within a market in which a massive number of digital payments are transacted.
Every year, trillions in digital payments transactions are transacted in China. When looking specifically at mobile payments, that market is predicted to experience a compound annual growth rate of 21.8 percent. This would bring mobile payments from US$29.93 trillion in 2017 up to $96.73 trillion in 2023. This growth would be driven in part by the rising demand for online shipping, said a Frost and Sullivan market forecast.
Furthermore, the total number of customers actively using mobile payments is predicted to break the 956 million mark by 2023, said the same company. The market is also undergoing a spike in the number of cross-border transactions, especially in overseas education, travel, and e-commerce in general. By 2016, they had already reached $6.6 trillion, illustrating the tremendous opportunity opening to PayPal through the GoPay acquisition.