SHANGHAI: eBay’s global online payment system, PayPal, has come to China, custom-designed for the country’s Internet users. The free service, PayPal China, launched Monday, allows Chinese Internet users to make safe and secure online payments in the Chinese local currency.
The service has been integrated with 15 Chinese banks and 20 debt cards, PayPal International, the eBay subsidiary that runs the service, said.
eBay is extending the service to China through a strategic cooperation with ChinaPay E-Payment Service Co Ltd, a unit of the group that runs China’s credit card clearing system. Two of China’s Internet portals, NetEase Inc and TOM Online Inc, are also partners in the venture.
Purchases made on the portals will be covered by PayPal’s buyer protection program. Another ecommerce marketplace in the country, eBay EachNet, is expected to join the program from 1 September.
PayPal International’s vice president Mathias Entenmann said PayPal China “will improve the payment experience and increase the velocity of ecommerce in China”.
PayPal’s realtime payment solution makes use of the infrastructure of bank accounts and credit cards of individual users or businesses, who can with an email address send and receive payments online securely and quickly. With some 72 million accounts, it operates in 56 markets around the world. Apart from security, PayPal guarantees total confidentiality of customer information.
PayPal runs international services in Australia, Austria, Belgium, Canada, France, Germany, Italy, the Netherlands, Spain, Switzerland and the U.K. The currencies acceptable under the payment system are U.S. dollars, Australian dollars, Canadian dollars, Euros, Japanese Yen and Pound.
The company is not integrating the Chinese service with its international operations due to restrictions on the convertibility of the Chinese yuan.
The Chinese online store, Alibaba.com, has its own online payment system, AliPay. The company said AliPay’s June transactions in China were equivalent of $16.9 million. It has three million registered users.
eBay is estimated to have 80 per cent share of China’s online auction market in 2004. It expects the transaction volume to grow more than 30 per cent to $400 million-plus in 2005. The company will spend $100 million on brand promotion in the country, which it feels will become the largest market in five to 10 years.
eBay had come to China in 2002 by acquiring 33 per cent stake in Shanghai-based EachNet for $30 million. It bought the balance stake in 2003 for $150 million.