Apr 29, 2021 (China Knowledge) - Paypal (PYPL) has recently set its sights on the cross-border payments business in China. This sets them apart from the duopoly Alipay and WeChat pay, where Paypal’s cross-border payments business would help Chinese merchants collect funds as well as pay for overseas goods.
The market size for cross-border e-commerce payment surged from RMB 3 trln to RMB 6 trln in a span of 5 years, from 2016 to 2021. However, this space might be already dominated by Amazon, which hosts one of the largest marketplaces for Chinese exporters to sell online and for merchants to collect funds.
Paypal has cleared the regulations from the Chinese authorities and are looking to join the competition between Amazon (AMZN) and eBay (EBAY) to be the most popular application for cross-border payments.
Ant Group has also set its sights on the cross-border payments market, with the intention of spending 40% of their IPO’s net proceeds to capitalize on this market. However, their IPO did not materialize, and this might be an advantage to Paypal.
Thus, the key decider in this multi-legged battle between the tech giants would be determined by the market penetration as well as the fees of each company that is charged for the service.
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