eBay officially launched its online payment service PayPal in China on Monday (https://www.paypal.com.cn). PayPal China offers payments in the local currency and offers integration with 15 Chinese banks and more than 20 different debit cards. There is no charge to users.

The PayPal China service does not support cross-border transactions due to Chinese currency laws, according to PayPal spokesperson Amanda Pires. She said eBay's Chinese users can use PayPal.com, however, in which case they would be trading in non-local currency.

On September 1, PayPal China will be integrated with eBay Eachnet's An Fu Tong, an escrow service. Pires said escrow is a preferred way to pay in China. It will be a "funds in/funds out" service in which buyers can fund An Fu Tong escrow payments with PayPal China payments, and sellers can withdraw escrow payments to their PayPal China accounts.

PayPal's press announcement stated its service is the only direct online payment service that offers a buyer protection program for purchases made on popular Internet portal sites Netease and TOM Online. PayPal will offer buyer protection on China's leading ecommerce marketplace, eBay EachNet, on September 1, 2005.

Other international PayPal sites include PayPal Australia, PayPal Austria, PayPal Belgium, PayPal Canada, PayPal France, PayPal Germany, PayPal Italy, PayPal Netherlands, PayPal Spain, PayPal Switzerland and PayPal UK, and enables payments in six currencies outside of China: U.S. dollars, Australian dollars, Canadian dollars, Euros, Japanese Yen and Pounds Sterling.

PayPal China will compete against Alibaba's AliPay service, which is based on an escrow model. Alibaba said in April 2005, 83 percent of listings on its TaoBao auction site accepted AliPay.