PayPal hopeful of door opening to China market
US-based PayPal hopes to become the first foreign online payment service provider to win a domestic payment licence in China, where the e-commerce market is worth an estimated US$121 billion.
Senior vice-president for Asia Rupert Keeley said the company was cautiously optimistic that the People's Bank of China would give it a licence, after applying late last year.
China has kept a tight grip on its electronic payment services business, and industry players have often called for it to be relaxed. No overseas companies have so far been awarded a permit to process domestic payments in China. But last year local operators such as Alipay, owned by mainland e-commerce giant Alibaba, were granted the payment licences.
PayPal, which yesterday launched a smartphone app and plug-in device to let small business owners take credit and debit card payments through their mobile devices, said it hoped to introduce the same technology to the mainland once its licence was approved.
The company said small business owners often lacked access to credit card payment devices, and risked losing customers. The service known as PayPal Here solved this problem, enabling anyone with an iPhone to receive credit card payments, although the service was expected to expand to include other smartphones as well.
Hong Kong, where half of the population has a smartphone, is one of the first markets to get the service.
PayPal planned to open an office in India, and expand operations elsewhere in Asia, Keeley said. At present, PayPal has offices in six Asian markets, including the mainland, Hong Kong, South Korea and Singapore.
PayPal's business has expanded significantly, largely due to its operations in emerging markets. It has more than 106 million active accounts in 190 markets worldwide.
China's ballooning online market and fast-growing economy is attracting strong interest from overseas companies, and local players are scrambling to meet the challenge.
Alipay has about half of the mainland online payments market, and last month announced a landmark alliance with the mainland unit of Standard Chartered Bank.
The milestone is expected to help swell the number of Alipay's registered accounts, which was more than 650 million last year.
The number of currencies, including Hong Kong dollars, that PayPal accepts