According to Marca (h/t Ryan O'Donovan of Football.London), Arsenal will have to match Barca's offer if they are to have any chance of taking the Argentina international to the Emirates Stadium.
O'Donovan added that Boca Juniors are under no pressure to sell—Pavon's contract runs until 2022—and would likely welcome the prospect of a bidding war ensuing between Barcelona and Arsenal.
Barca's entrance to the race for the 22-year-old could be a big blow for Arsenal.
The Gunners cannot offer Pavon what the Blaugrana can, both in terms of potential silverware and financial reward.
Barca are La Liga champions and look set to make a big push to win the UEFA Champions League for a sixth time next term.
Arsenal, meanwhile, finished outside the Premier League's top four for the second season running in 2017-18 and can only offer UEFA Europa League football.
The Gunners may, though, be able to offer Pavon more game time than he would get in Barcelona's competitive squad.
Pavon is a versatile attacker, able to play on either flank or as a centre-forward, so he would be a useful addition to Unai Emery's new-look Arsenal squad:
His variety and creativity are likely also attractive to Barca manager Ernesto Valverde.
If he does move to either Barcelona or Arsenal, Pavon would be making a big step up. He was impressive in the Superliga Argentina last term for Boca, as he netted six goals and recorded 11 assists, earning himself a spot in Argentina's 2018 FIFA World Cup squad.
La Liga and the Premier League are of a higher standard, but Barca and Arsenal seemingly both believe he has the talent to excel in Europe.