Entry of PayPal to boost cross-border payment services

The opening of China's payment clearing market will prompt domestic third-party payment processors to comply with international rules, bolster their capabilities to deliver cross-border payment services, and give them a better chance to contain financial risks, analysts said.

PayPal Holdings Inc, one of the biggest US digital money transfer platforms, will become the first foreign payment platform to be licensed to provide online payment services in China after its subsidiary, PayPal Information Technologies Co Ltd, received approval from the People's Bank of China, the country's central bank, to acquire a 70 percent stake in the domestic payments firm Guofubao Information Technology Co Ltd, also known as GoPay.

"One of the main reasons behind this move is to show Western countries that China is serious about opening up its financial markets, rather than only paying lip service. The level of openness will go beyond expectations of the Western media, politicians and business leaders," said Zhao Yao, deputy secretary-general of Beijing Cyber Law Society and a payment industry expert.