China’s central bank approved the acquisition of Beijing-based digital payments company Guofubao by a local PayPal subsidiary, allowing the US provider to gain a foothold in one of the world’s leading markets for mobile transactions.

In an announcement, Guofubao confirmed The People’s Bank of China had given the nod for PayPal’s Shanghai-based subsidiary Yinbaobao Information Technology to acquire 70 per cent of the company.

Through brand GoPay, Guofubao provides a variety of B2B and B2C platforms for digital payment services and holds a number of financial service licences.

It supplies third party mobile wallets, remittance services and works with major banks in the country.

Taking advantage of China’s burgeoning mobile payment sector, which is dominated by WeChat parent Tencent and Ant Financial’s Alipay, has long been an aspiration of PayPal CEO Dan Schulman.

In February 2018, the executive highlighted the significant opportunity in the country, having signed partnership agreements with tech giant Baidu and subsidiaries of Alibaba.

With the acquisition PayPal becomes the first major Western digital payments company to hold a banking licence on the Chinese mainland.

Financial details of the transaction were not disclosed.