PayPal, the world’s largest online payment platform, is planning to offer a system that would lift the cap on foreign exchange settlements for small Chinese businesses in a move which could help strengthen the position of its parent Ebay in the world’s fastest growing e-commerce market.
PayPal has struck a deal with the government of Chongqing, China’s largest municipality, to offer a range of services – including, for the first time, a foreign exchange settlement solution – to Chinese entrepreneurs selling to consumers overseas.
Chinese authorities have set a ceiling for individuals to convert foreign currency into local currency of $50,000 a year. PayPal said this regulation hinders Chinese small businesses and entrepreneurs from building a cross-border e-commerce business and that its payment platform would help small merchants get quick access to an export licence, which allows a higher conversion ceiling.