Online payments giant PayPal has managed to accomplish what everyone’s trying to do: it’s found a way into China. The world’s most populace country is a prize that firms in almost every industry are competing for. Its staggering amount of economic growth, huge and newly-minted middle-class, and position at the forefront of the world’s cutting-edge trends, makes it the perfect place to pursue more than a billion new customers with disposable income. How did PayPal do it? With an acquisition.
PayPal’s share price has appreciated by 24% so far this year
Source: Yahoo Finance
In a LinkedIn post from a week ago, PayPal’s CEO Dan Schulman announced: “The People’s Bank of China has approved PayPal Information Technologies Co., Ltd.’s acquisition of a 70% equity interest in Guofubao Information Technology Co. (GoPay), Ltd., a holder of a payment business license in China. 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. The transaction is expected to close in the fourth quarter of 2019 and is subject to customary closing conditions.”
Dominion holds PayPal in its Global Trends Ecommerce Fund.
Author: Theo Leworthy