Congress’s Select Committee on the CCP sent a letter to PayPal Holdings (NASDAQ:PYPL) seeking assurances that the fintech’s integration with Chinese fintech WeChat Pay complies with U.S. anti-money laundering requirements, the committee said on Monday.
PayPal (NASDAQ:PYPL) stock slipped 1.4% in midday trading. Stocks of rival fintechs also dropped. Affirm Holdings (AFRM), known for its buy now, pay later financing, fell 3.9%, and Cash App parent Block (XYZ) declined 2.2%.
The integration allows PayPal (NASDAQ:PYPL) users in the U.S., Canada, and Europe to both remit funds directly into Weixin (WeChat) Pay wallets and linked bank accounts in the People’s Republic of China and to make purchases in the PRC using WeChat Pay QR codes.
“The Committee is concerned that these integrations could enable Chinese Money Laundering Organizations (CMLOs) — already documented as using Weixin Pay to facilitate fentanyl trafficking and other illicit activity — to move illicit funds directly through PayPal–Weixin Pay channels,” the committee said in a statement.
Such a development could potentially bypass Know-Your- Customer (“KYC”) and AML rules required under the Bank Secrecy Act, it added. The committee also emphasized that Tencent Holdings, the ultimate parent of Tenpay’s WeChat, has been designated a “Chinese military company” by the U.S. government.
“While acknowledging PayPal’s past compliance contributions, the Committee insists on enhanced due diligence, greater transparency, and tailored controls to address the significant risks posed by Weixin Pay integrations. To evaluate PayPal’s compliance posture, the Committee has requested a staff briefing and production of documents — including agreements with Tenpay, risk assessments, compliance procedures, suspicious activity reports, and recent audits — by October 3, 2025,” the committee said.
PayPal (PYPL) didn’t immediately respond to a request for comment from Seeking Alpha.