This comes as news before Christmas, PayPal has officially launched in China. The famous online payment system has taken over GoPay, a similar Chinese payment company. The deal started in September but finalized in December. Making it the first foreign company to own a Chinese payment license.
Chinese Retail Payment Market
Many experts feel that the online payment market in China has a very low-profit margin. Companies like AliPay and WeChat Pay provided better services but also lost a lot of money. The online payment system doesn’t have a transaction-based revenue model. They monetize customer traffic and data insights. Secondly, PayPal will face significant competition from local giants. The online systems already deployed in the local market are backed by multi-billion conglomerate. For instance, WeChat Pay is backed by Tencent Gaming the famous video gaming conglomerate. Thirdly, AliPay and WeChat pay provides advanced service quality. They are looking to expand into the facial recognition payment method.
Will PayPal be able to survive in the Chinese Local Market
Looking at the advancement and tough competition provided by Chinese locals, will PayPal be able to survive? The thing is AliPay and WeChat already provide cheap, reliable and faster online payment transactions. Something that PayPal does. Also, what competitive edge will PayPal ensue? Will it look into a different more convenient method of payment in China? The advanced facial recognition might still have some quirks to comb out. Most of the people still believe facial recognition might not yet be safe to be introduced. PayPal can definitely look into this and adapt a better method to ensue. Moreover, what strategy will PayPal use to drive customers to use their services? They can promote an e-ticketing method using their services. But it is highly doubtful that the Chinese government will release such sensitive information to a foreign company.
This might be a great move for PayPal to penetrate into one of the strongest economies in the world. However, many questions remain unanswered.
What do you think about this?
* You will receive the latest news and updates on your favorite celebrities!