On July 11th, eBay announced the official launch of its PayPal service in China, called, not surprisingly, PayPal China.

The new service allows Chinese users to make secure and confidential payments in Chinese currency. It also offers integration with 20 different credit cards, as well as 15 Chinese banks.

One important point is that the service will not, at this stage, be integrated with the international version of PayPal. This is due to restrictions on the convertibility of the Chinese yuan.

The new system is expected to boost ecommerce in China.

PayPal are keen to point out that its service is the sole direct online payment service which offers a buyer protection program for purchases made on the Internet portal sites NetEase Inc and TOM Online Inc, which are very popular in China.

eBay's main competition comes from the popular online store Alibaba, which has its own online payment system. eBay believes its new PayPal service will help them to increase their share of the market and help them to better compete with Alibaba.