PayPal, the world leader in digital wallets is finding it hard to make it in the China Payments market, having been excluded from the 7th tranche of third party payment provider licences. Will it reach outer space first?
Having cemented its position as the world’s digital wallet for online payment, PayPal has been turning its thoughts towards outer space. This would appear to be the appropriate logical next step for a digital wallet provider that has managed to reach out across so many countries and currencies as few others have. PayPal stuck it out through multiple challenges in India, Malaysia and even recently achieved success in Japan. It has even become an accepted way to pay for iTunes on Apple.com, Germany.
However, their work here on earth is not quite complete yet. As Goscinny and Uderzo from my favourite Asterix comics might put it :
“Earth is entirely occupied by PayPal, Well, not entirely … One small village of indomitable Gauls still holds out against the invaders.”
In this case that small village is China, with its population of 1.35 billion only.
In the last weeks there have been strong assertions from PayPal regarding their expectations of receipt of a third party provider payments license. Last month CEO John Donahoe was reported to be confident of becoming the first foreign company to obtain this much sought after license.
However 7 tranches of licenses have been issued, but PayPal is not included. In January 2013, 26 more licenses were issued, including prepaid card issuance, internet payment and remittance business. Then this month an additional 27 licenses were issued, and foreign companies were included. Edenred China, a France-based company with prepaid business, and Sodexo Pass, another French company were among those included.
It is possibly really “just around the corner”, but with the clock ticking since PayPal first applied for the license in January 2011, and a 830 trillion yuan ($134.3 trillion) market at stake, what options may PayPal consider? The M&A route being adopted by other Chinese companies, for acquiring a license in China is unfortunately not so easy for foreign companies. The alternative is waiting it out while the 250 licensees steam ahead. So will it be next stop China, via outer-space …
Our recently published “Digital Money in China” viewport has unique and up-to-date coverage of the China ecosystem, initiatives and opportunities in payments and money transfer. Contact us at contact@shiftthought.com for more details.
Pingback: Digital Money | Mobile Money in China – a classic example of Digital Money | Digital Money