PayPal Acquires 100% Stake in Chinese E-Payment Firm GoPay
'Catalyst Effect' in China's Monopoly Fintech Market Including Alipay
[Asia Economy Beijing=Special Correspondent Jo Young-shin] PayPal, a US electronic payment company, is entering the Chinese mobile and online payment market, which is monopolized by Alipay (Zhifubao) and WeChat Pay (Weixin Zhifu), as an independent corporation.
As the Chinese government strengthens anti-monopoly regulations on the mobile and online payment market, attention is focused on whether the entry of a US company into the Chinese fintech market will create a 'catfish effect.'
According to Chinese media such as Sina on the 12th, PayPal recently purchased an additional 30% stake in the Chinese electronic payment company GoPay. PayPal acquired a 70% stake in GoPay in December 2019 and received approval from the People's Bank of China, the central bank, for the acquisition last August.
With this additional stake purchase, PayPal now owns 100% of GoPay. PayPal is the first foreign company to own 100% of an electronic payment platform in China.
Founded in 2011, GoPay holds licenses for online payment, mobile payment, prepaid card issuance, and overseas yuan payment services. Once PayPal receives final approval from the People's Bank of China, it will be able to independently provide online and mobile payment services in China. PayPal has over 286 million active payment accounts in more than 200 countries worldwide and supports transactions in over 100 foreign currencies.
Chinese media are focusing on the potential changes in the ecosystem of the Chinese e-commerce market. They are closely watching the possibility of changes in the Chinese electronic payment market, which is monopolized by Alipay and WeChat Pay with over 90% market share.
Considering that the Chinese government has blocked Ant Group's IPO due to concerns about the monopoly of Chinese fintech companies and has shown a willingness to open the financial market, Chinese media expect some degree of market share change.
Meanwhile, as of 2018, the scale of China's mobile payment and e-commerce market is reported to be $25.9 trillion (approximately 28,500 trillion KRW).
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