Payment platform PayPal will be combined with China silver

March 17, "It Times" in the first news, ebay's payment platform PayPal may be with China's electronic payment service provider China UnionPay cooperation, so that users of China UnionPay overseas website shopping can be more convenient settlement, So Chinese consumers can shop and pay money from overseas merchants. According to the news, if the agreement is reached, from the third quarter of this year, China UnionPay card holders will be able to contact their bank card and PayPal, and contact the world's nearly 8 million online merchants.

Some people in the industry feel that PayPal and China UnionPay cooperation is a good news, is also considered as PayPal again to China's electronic payment market exerting force. Last year, the company performed well in the Asia-Pacific online payment market and traded more than $6 billion trillion. But in China, the largest market in Asia, PayPal's turnover accounted for only 50% of its total in Asia-Pacific, which has been linked to PayPal's development in China. For now, the American company is looking at the Chinese market again.

Tapping the Chinese market again

According to the relevant news, according to the agreement, China UnionPay customers from the third quarter will be able to use PayPal's network payment services to buy foreign goods, while some foreign retailers will be targeted to the shopping site changes, such as the increase in Chinese content and low-cost delivery channels, so as to attract more Chinese consumers.

The U.S. e-commerce giant in the Chinese market development road is extremely difficult. ebay, which has been operating in China only through ebay since withdrawing from the Chinese market in 2006, has a low market share. On the contrary, China's Consumer-to-consumer e-commerce market share of 87% is firmly occupied by Taobao. The latest data show that as of March 14, Taobao payment tools Alipay registered users have reached 300 million, the daily turnover of more than 1.2 billion yuan.

"Alipay occupies the vast majority of China's online payment share, much higher than PayPal's Chinese payment platform wholly-owned subsidiary ' PayPal ', in this situation PayPal wants to compete from the front, very difficult. "In the industry, PayPal via China UnionPay's behavior to do the above interpretation."

However, PayPal in the United States base of E-commerce development is also facing a bottleneck stage. According to Gfkgroup released data, 2008 U.S. E-commerce sales year-on-year growth rate of only 6%, "the mature market has shown its habitual weakness of the problem," the agency expressed views.

On one side is the saturated US market, which is rapidly growing China's lost ground, and it is clear that PayPal's cooperation with China UnionPay is aimed at bringing in more Chinese consumers and thus opening up the Chinese market further. Not long ago, the two sides issued a joint statement saying that there are about 2.1 billion Chinese UnionPay card users in China.

Some analysts said that PayPal and China UnionPay cooperation, will make full use of each other's grasp of the core of Chinese users and PayPal network of merchants, so that overseas merchants can compete with Taobao, this PayPal can also be in China and Alipay to compete.

The American firm has never given up on the Chinese market. Earlier this year, PayPal China to get rid of ebay control independent development, in order to carry out a better localization of the construction. Moreover, the company plans to increase the number of employees in the Asia-Pacific region from 1000 to 2000 by the end of 2010. PayPal CEO Thompson predicts that the company's business in 2011 will be one-fold larger than in 2008, and that market share in Asia will rise.

PayPal Asia-Pacific Business unit Vice President Fahad Airani said: "The rapid development of PayPal in the Asia-Pacific market is largely dependent on cross-border cross-border trade, we firmly believe that in the next few years, PayPal will be in the Asia-Pacific countries in the domestic trade plays an increasingly important role. ”

Foreign trade regulation difficult

For this cross-border cooperation, the industry still has a lot of voice on PayPal This move can pose a threat to Alipay skeptical. "At present, PayPal is also difficult to benefit from cooperation in a relatively short period of time, Chinese users buy goods online most still tend to domestic, overseas transactions accounted for only a small part of the total volume." The market for Chinese consumers buying overseas products is still at an early stage, and the market has grown too early.
PayPal has unilaterally said that cooperation with China UnionPay will help users circumvent foreign exchange controls that limit Cross-border transactions. A PayPal spokeswoman said the company would be able to facilitate cross-border transactions "because China UnionPay has been approved by China's regulatory authorities to engage in cross-border transactions".

PayPal's success will depend on cooperation with businessmen and financial services companies, "says Fahad Airani, vice president of the Asia Pacific Business Unit." It also requires local governments to continue to provide the necessary support. " "We will work closely together," admits one senior Chinese UnionPay executive. It is noteworthy that neither side disclosed details of further cooperation.

In the eyes of some industry people, things are far less simple than PayPal expected. In their view, payment companies usually encounter problems of foreign exchange control, financial security, merchant audit (especially overseas betting, pornography, etc.), after-sale service and payment process. "If the funds flow through PayPal to foreign countries, unrestricted purchase of related services, I am afraid that the regulation will create a certain loophole." A person who declined to be named at a domestic payment company said to the Economist.

All along, China's inspection of imports of goods is extremely strict, cosmetic as an example, the Mainland cosmetics import regulations, each product introduction will take a year to pass the health quarantine, quarantine by the Ministry of Health issued sanitary quarantine number and Chinese label, which can enter the domestic market. PayPal and the Chinese silver Joint, the Chinese consumer to face the cooperative merchants are PayPal global, so, regulatory difficulties will be greatly increased.

"Much of the income from overseas payments comes from poor margins such as betting and pornography, and it is precisely this part of the business that supports PayPal's high rate operating model, which is considered legal abroad." Once the Chinese consumers enter the market, the equivalent of fish into the sea, consumer behavior will be beyond control. "The personage analyses mercilessly.

At the same time, many in the financial sector are also concerned about the security implications of this cooperation. "The information of domestic UnionPay users is easily accessible to foreign companies, which poses a threat to the current financial system in China." "The head of the electronic Banking Department of a commercial bank said so. It is for the same reason that foreign companies, such as Visa and MasterCard, have repeatedly been questioned in the Chinese market.

For overseas market transactions, the relevant departments have been strict requirements, in any case involving financial cooperation, there will be restrictions on foreign investment, this is any one involved in foreign transactions of the payment company will face problems.