The People’s Bank of China (PBC), the central bank of the Asian economic supergiant, has approved the application of Paypal, a global online payment service provider, to acquire Chinese fintech company, GoPay. The acquisition makes Paypal the first foreign investor to enter the elusive Chinese fintech market.
Paypal said in a statement confirming the acquisition that the deal will be closed before the end of the fourth quarter of 2019 is subject to customary closing conditions. The company said that they are “honored” to be given the opportunity to participate in China’s robust financial technology market.
“We are honored to become the first foreign payment platform to be licensed to provide online payment services in China. We look forward to partnering with China’s financial institutions and technology platforms, providing a more comprehensive set of payment solutions to businesses and consumers, both in China and globally,” Paypal said.
In a statement made by GuoFubao, the company behind GoPay, PayPal was able to acquire the controlling stake through the Shanghai-based subsidiary, Yinbaobao Information Technology (Shanghai) Co., Ltd. GoPay has licenses to provide financial services both online and through a mobile app. The company provides a payment option to a wide range of corporate clients in e-commerce, cross-border commerce, aviation tourism, and others.
“[Translated] In the future, Guofubao will, as always, conduct business in accordance with the requirements of various regulatory policies and regulations under the guidance of the regulatory authorities, resolutely implement the requirements of various regulatory work, and legally and compliantly carry out payment services,” said the company in a statement.
Aside from confirming that PayPal will acquire a 70% equity state in GoPay, neither of both parties discussed any other terms of the aforementioned deal.
The acquisition of GoPay by PayPal came in the midst of an intensifying trade war between the U.S. and China. The dispute escalated to the point that the White House is already thinking of curbing some investments made by American companies in China.
