PayPal pushes into China

eBay is going to China — or so a confident John Donahoe says.

The CEO said this week at the Reuters Global Technology Summit that eBay will become the first foreign company to secure a financial payments license in China, a nation where many Silicon Valley companies are shut out or struggle to maintain tenuous ties.

Donahoe told Reuters that he sees ‘encouraging signs’ from the Chinese authorities” that eBay will soon have the green light to roll out its payment platform, PayPal, in the Asia powerhouse. In the interview, he offered only the vague time frame of “three months to five years.”

PayPal, which eBay acquired in 2002, has been furiously pushing its way into Asia and South America by riding the mobile explosion in emerging nations. The company’s popularity is soaring in Brazil, a country where more people own phones than computers but few have credit cards, and is growing its partnerships with Russian retailers, too.

On a recent call with investors, Donahoe credited eBay’s revenue growth to PayPal’s international success. Getting into China, where the e-commerce market is expected to hit $300 billion by 2015, could catapult PayPal to new heights and position eBay as the global e-commerce powerhouse.

eBay’s marketplace business has become one of the most successful foreign online retailers in China. In 2011, an eBay spokesman called China the company’s “fastest growing export market.”

The problem? That pesky issue of privacy. Current PayPal users depend on a certain level of protection from peering eyes, whether they are state-sponsored surveillance programs, malicious hackers or government data collection, and its privacy policies are one reason the company has done well in markets where online fraud is rampant. Whether PayPal could maintain those privacy protections in China is another question.

 

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  • Well, i think this is really good and about time. Currently the only ways for most mainland Chinese to pay are either with Union Card or Alipay. Both are problematic and difficult to set up on websites.

 
 
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