PayPal, the online third-party payment platform of eBay, is expected to become the first foreign firm to gain a financial payment license in the Chinese mainland.
John Donahoe, CEO of the US online auction and shopping service provider, forecasted at a forum on June 17 that there would be possibility for PayPal to become the first foreign firm to gain a financial payment license in the Chinese mainland.
A top executive with PayPal disclosed in an interview recently that it had not had an exact timetable as gaining a financial payment license in the market depended much on concerned rules and regulations. There would be possibility for it to establish a joint venture there and through the venture, it might gain such a license. It had been unknown with whom it would set up the venture and how much stake it would take in it.
In line with industry observers, there would be great possibility for PayPal to gain a financial payment license after the administration change. However, the license would not help eBay much in either ecommerce or online third-party payment there. Foreign Internet firms always performed not well in the market and there was no exception to the US-based one.
Available information shows that eBay injected USD 30 million into China-based online auction website Eachnet.com in March 2002 and through the move, it entered the Chinese market. On June 12 that year, it invested USD 150 million in the latter. Later, it controlled the latter. However, the latter saw share in the market continue dropping and the share reached about 20 percent in 2006. Later, it announced a joint venture with Tom Online and in April this year, eBay quit it, leaving it to become a wholly-owned subsidiary of Tom Group.
The Chinese C2C sector is dominated by Taobao.com, a subsidiary of Chinese ecommerce giant Alibaba Group currently and as for this, John Donahoe said that it as a foreign firm did have not a sharp edge in the Chinese ecommerce and online third-party payment markets. However, as time went by, the Chinese economy would become a real part of the global one.
eBay sees business size in the Chinese mainland reach about USD 6 billion currently and in the opinion of the CEO, growth of the market would continue being higher than that of other markets in the world. PayPal is the biggest online payment firm around the globe and has established a leading position in over 190 major ecommerce markets globally.
