It's a very smart collaboration with PayPalm who has one of the richest overseas online merchant resources, and UnionPay serves the world’s largest cardholder base.
Thanks to this new service called PayPal China Connect, UnionPay cards are now accepted by all online merchants that accept PayPal. The benefits for the customers are clear: when making a cross-border online payment, UnionPay appears now as an option payment and the amount in the transactional currency is converted into Chinese Yuan directly based on the transaction day's exchange rate. Conversion through an intermediary currency is no longer necessary, which may help them save 1% to 2% of conversion fee on each transaction.
Although cross-border online shopping has always been constrained by frequent issues related to language barriers, privacy protection and after-sales service, it is becoming increasingly popular among Chinese consumers.
According to a survey commissioned by Paypal, more than 80% Chinese consumers preferred online payment in cross-border payment. In 2014, the total number of mainland Chinese cross-border online shoppers reached 18 million putting China as the third cross-border online shopping destinations globally. New solutions offered by PayPal China Connect providing the cardholder with a more convenient and secure online payment experience will contribute to the on-going exponential rise of the volume of foreign brands purchased by Chinese shoppers. Added to less payment restrictions, it will inevitably accelerate the volume and value of cross-border flows in China, with a continued rapid growth.
Accepting UnionPay as a payment option is a move on Paypal’s part to expand its presence in China Paypal. As CEO Dan Schulman recently noted :”bringing PayPal to China is a top priority for the company in order to remain a leader of the payment processing industry in Asia, especially during this challenging wave of change involving new players such as Alipay and Apple pay”. Schulman is aware of it, just as eBay was defeated by Alibaba, Paypal could be the next target.
