Chinese web services conglomerate Baidu has announced it has reached an agreement with PayPal to take its mobile wallet business global. The deal brokered between the two entities is yet another illustration of PayPal’s new strategy to expand its presence in mobile.
In recent months, PayPal has entered into a number of partnerships with companies such as Apple and Samsung for its mobile payment options, whilst in addition to these agreements it has also brokered deals with Citi and Chase for instant bank transfers which makes it much easier and efficient for merchants to sell on a global basis.
PayPal highlighted its new partnership agreements in its statement following the release of its latest financial results. It stated that it was part of the organizations overall strategy to broaden the relevance of its platform. A spokesman said: “Important strategic partnerships are broadening the relevance of PayPal’s platform and increasing PayPal’s addressable market.”
The benefits of the collaboration was a no-brainer for Baidu, who has identified the agreement with PayPal as the smartest and fastest way to increase its competition with China’s leading mobile wallet companies Alipay, which is owned by e-commerce giant Alibaba and Tencent. Alipay has 500m users, while Tencent has 600m users.
In a report issued by the UN, it indicated that the two services account for more than 90% of China’s mobile wallet market, and have estimated to have processed close to $3 trillion cumulatively in 2016. The report conducted by the UN, placed Alipay ahead on $1.7 trillion, compared to $1.2 trillion for WeChat Pay. Baidu was not included in the study.
Alibaba and Tencent have both recently announced partnership agreements with Stripe, in an attempt to expand the use of their payment mechanisms outside of China, and it seem evident that the deal with PayPal is Baidu’s retort.