PayPal Becomes First Foreign Company To Fully Own A Payments Platform In China

PayPal Holdings Inc PYPL became the first foreign company to be in complete control of its payment platform in China, Reuters reported Thursday (Shanghai time). 

What Happened: The Elon Musk and Peter Thiel-founded fintech firm acquired the remaining 30% stake in China’s GoPay — formerly known as Guofubao Information Technology Co. — that it did not own as of Dec. 31, 2020, as per China’s National Enterprise Credit Information Publicity System.

A year earlier, PayPal had purchased 70% of the stake in GoPay for an undisclosed amount, according to Reuters.

Thereafter, the entity became the first foreign company licensed to operate as a payment services company in China.

No financial details of the latest transaction were disclosed.

Why It Matters: This latest development will pitch PayPal head-to-head against domestic heavyweights such as Alipay — owned by Alibaba Group Holding Ltd’s BABA Ant Group, and WeChat Pay — owned by Tencent Holdings Ltd TCEHY, noted Reuters.

Jack Ma-founded Alibaba is at the center of Beijing’s crusade against monopolies. The fall out of the antitrust drive may extend to others such as Tencent.

See Also: China Silences Domestic Media On Alibaba Probe: FT

The Chinese conglomerate also suffered a recent setback in the United States after Outgoing President Donald Trump banned transactions through its Alipay app.

Price Action: PayPal shares closed nearly 3% higher at $244.90 on Wednesday and gained 0.42% in the after-hours session.