Paypal and China UnionPay have reached an agreement to allow UnionPay card holders to shop online with Paypal as the California-based company seeks to expand its number of users and tap the boom in China's online spending.

Scott Thompson, president of PayPal, a unit of online auction giant eBay said "We hope online shop owners around the globe will welcome millions of new customers as the partnership with UnionPay eliminates the payment barrier for shoppers."

UnionPay, which operates the country's interbank clearing and settlement system, has issued more than 2.1 billion cards on the mainland.Paypal also plans to double its head count in Asia to 2,000 by the end of this year.

From the third quarter of this year, UnionPay card holders will be able to link their bankcard accounts with PayPal and access overseas online shops. Previously, users on China's mainland could only use Visa or Mastercard to activate their Paypal accounts.

Alipay, the online payment unit of Alibaba, has more than 300 million registered users, nearly three times the number of Paypal's Chinese users.