The entry of payments giant PayPal into the Chinese market is expected to further winnow out smaller players in the sector.
At the start of October the People’s Bank of China (PBOC) gave its approval to PayPal’s acquisition of a 70% equity stake in Chinese payments company GoPay (国付宝), making the US payments giant the first foreign-invested company to gain access to the domestic sector.
PayPal’s entry is expected to shake up the Chinese payments sector – and mobile payments in particular, by disrupting the heavy domination of Alipay and WeChat Pay while also driving acceleration of the withdrawal of smaller recent entrants.
According to the “2019 Q1 China Third Party Quarterly Data Report” (2019Q1中国第三方支付季度数据发布) from iResearch Consulting Group, Alipay and WeChat Pay account for a 53.8% and 39.9% stake respectively of China’s mobile payments markets, with remaining players laying claim to a less than 10% share.
Data from Tianyancha (天眼查) indicates that CHina saw a surge in the registration of new mobile payments enterprises in China in 2017 when the figure exceeded 700 in total, before dropping to just over 200 the following year.
Approximately 150 mobile payments enterprises registered since 2017 have since cancelled their registrations, however, with over 2000 companies in the mobile payments sector currently active.
Guangdong province remains the key hub for the Chinese mobile payments market, host over 800 companies in the sector, or around 40% of the total.