PayPal Taps Cross-border Trade Potential With New China Deal

From PC World: EBay's online payment service PayPal is hoping to hit a "sweet spot" in China's e-commerce market by making it easier for Chinese merchants to make money from overseas sales.

On Tuesday, PayPal signed an agreement with the Chinese city of Chongqing to jointly develop an international e-commerce hub that seeks to build cross-border trade between Chinese merchants and buyers from abroad.

PayPal, with access to 190 countries and regions, has become an important tool for Chinese merchants wanting to make sales to Internet users abroad. At the end of this year, the company expects China to have more than 1 million users of its online service, most of them small and medium-size businesses.

Chinese merchants, however, still face obstacles with online transactions, said PayPal spokesman Dickson Seow.

One major challenge is that Chinese merchants making sales to the U.S. are limited to converting under $50,000 each year, unless they apply for the right license. Exchanging the foreign revenue into Chinese currency can also be cumbersome, with merchants forced to go to a bank and wait days before they receive the money, Seow said.

PayPal's agreement with the Chongqing government is meant to help resolve these problems. Next month, the company is launching a pilot program with the municipal government that will work toward finding solutions and streamlining those processes for Chinese merchants.

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