SAN JOSE, Calif.—PayPal has now gone live as the first U.S. payments company to enter China’s formerly closed digital marketplace.
China has rigidly prevented U.S. technology firms from doing business directly with its citizens, unless the American firms give up majority control and transfer intellectual property to Chinese partners, The Epoch Times noted.
But PayPal Holdings, Inc. announced that it completed the majority acquisition of 70% of Guofubao Information Technology Co., known in China as “GoPay.”
One objective of the United States in its trade war has been to open up the Chinese market to American firms without tech transfers. The final terms of the pioneering PayPal majority acquisition of GoPay, which provides online and mobile payments for e-commerce and aviation travel industries within China, were not disclosed, The Epoch Times said.
But it was disclosed that the remaining 30% of GoPay will be held by a Chinese-based company under the control of China’s Ministry of Commerce, the news outlet stated.
With approximately 817 million Internet connected individuals, 98.6% via mobile phones, the Chinese have dominated the global mobile payments marketplace with a penetration rate of about 47% of its 1.387 billion population in 2017, The Epoch Times said.
Norway was second with a 42% penetration rate, followed by the United Kingdom with a 24% rate. The United States is in a distant fourth place with a 17% penetration rate.