PayPal to launch a cross-border app in China but challenges remain
PayPal has unveiled its broad plan to become a substantial player in China’s cross-border payments industry.
PayPal has been on a growth path
In the past two decades, PayPal has transformed itself from a small fintech company to one of the biggest companies in the United States. The firm has a market capitalisation of more than $310 billion, making it the 27th biggest company in the world.
PayPal has achieved this growth by expanding its business offerings and adding millions of customers every quarter. Over the years, its business lines have increased substantially. In addition to its eponymous platform, the company owns Venmo, Honey, Braintree, and Hyperwallet, among others. This has seen it increase its total active users to more than 360 million.
It has also become a major player in several industries. For example, it is now one of the biggest players in the coupon industry. Further, it is a leading player in the cryptocurrencies industry. This week, the company announced that it will allow customers to sell and buy cryptocurrencies. The firm also owns Xoom, a leading cross-border payments company.
PayPal China ambitions
While PayPal has been a successful company globally, it has found substantial barriers in China. That’s partly because of the strict regulations in the fastest-growing economy in the world. It is also because of the strong positioning of native companies like AliPay and WeChat Pay.
This could be about to change. This week, the company announced that it will launch a mobile wallet that will focus on crossborder payments. The statement was made by Hannah Qiu, who was quick to say that the service will not compete with AliPay and WeChat. She said:
“We don’t have direct competition with local payment companies. Instead, we have a lot of cooperation with them. I’m not listing the companies’ names, but we have very deep cooperation with some local companies,”
Still, PayPal faces enormous challenges in China, where many American tech companies have struggled. For one, it faces the challenge of trust since many people in China are looking at the US with suspicion. Most importantly, it faces strong competition from well-known companies in the payments industry.