(Yicai Global) Dec. 20 -- PayPal Holdings has taken a 70 percent stake in GoPay's parent company for an undisclosed sum, making it the first overseas firm to have an online payments license in China.
California-based PayPal bought the stake in Guofubao Information Technology from HNA Technology Group, it said in a statement yesterday. The People's Bank of China, the country's central bank, gave the deal the green light in late September.
PayPal enters a digital payments market that is dominated by Ant Financial's Alipay and Tencent Holdings' WeChat Pay. But they offer limited services abroad. Chinese consumers could benefit from PayPal's extensive overseas network of e-commerce merchants and buyers. Set up in 1998, PayPal serves 300 million users in more than 200 countries and regions around the world, supporting online transactions in more than 100 currencies.
"We're pleased to complete this historic transaction, which enables us to broaden our participation in such a dynamic market," said Dan Schulman, president and chief executive of PayPal. "This important step will allow us to be a stronger partner to Chinese financial institutions and technology platforms."
Haikou-based HNA Group formed GoPay in 2011, but amid the conglomerate's liquidity crisis last year, GoPay was reported to have misappropriated proceeds from wealth management product to support the group. As a result, the PBOC handed Beijing-based Guofubao a fine of CNY46 million (USD6.6 million) last August.
Cofortune Information Technology, a unit of the China International Electronic Commerce Center under the Ministry of Commerce, retains 30 percent of Guofubao's equity after the PayPal deal.
Editor: Emmi Laine