Under the agreement, Baidu's payment platform, Baidu Wallet, will be accepted by roughly 17 million PayPal merchants globally, the Chinese firm said in a statement.

The deal comes as China's top payment firms, Alibaba affiliate Ant Financial and Tencent, are making aggressive moves to expand their payment networks overseas.

This year Ant Financial entered a USD 1.2 billion bid for U.S. remittance firm MoneyGram, a deal that has attracted scrutiny from U.S. lawmakers who say it could threaten national security.

Ant has also purchased stakes in half a dozen payment firms across Asia as part of a plan to expand its finance business outside of China.

Tencent's WeChat Pay has also inked a series of partnerships with global payment firms and earlier this month said it has applied directly for a Malaysian payments license.

PayPal will work with Baidu's financial services group under the new agreement to target cross-border payments between Chinese consumers and online businesses based outside of China.

Baidu Wallet has roughly 100 million users, and still trails behind Tencent's WeChat and Ant Financial's Alipay in terms of users and global reach.

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