PayPal operations in India are drawing to a close as the company makes plans to exit the domestic payments market in the country, according to an Economic Times report on Friday (Feb. 5).
The move is intended to streamline operations in India’s cutthroat market for online payments. Domestic operations include PayPal’s payments gateway and aggregator services for online merchants and brands.
The Silicon Valley financial services firm will soon alert its merchant partners in India that all contracts will be terminated on April 1, an anonymous PayPal spokesperson told ET.
“In the early days of the pandemic, when the government’s measures to curb the virus were gaining momentum, we started planning how we can protect our business and optimize our growth here,” the spokesperson told ET. “India is a very crucial market for PayPal, and after a thorough analysis, we decided that we are best placed here to focus on enabling cross-border trades and exports for Indian businesses aiming to go global.”
PayPal is now planning to grow its existing cross-border trade business for small enterprises, with an eye on getting a piece of India’s expanding export market.
“It made sense to us to do one thing right, which is our cross-border trade business, rather than to focus on multiple businesses … we can’t do everything here,” the source told ET. “From 1 April, we won’t be offering Payment Gateway and Aggregator services here. We are ensuring that this process is smooth for our customers and employees here.”
The company’s three technology centers — in Bengaluru, Chennai and Hyderabad — have some of the most extensive operations outside of the U.S. The business development teams are now pivoting to global trade and business, the source said. PayPal intends to maintain some operations for dispute resolution and refunds, the anonymous spokesperson said.
At the end of last year, PayPal’s international money transfer service Xoom integrated with NPIL’s/NPCI’s Unified Payments Interface (UPI) to bring inter-bank transactions to India. Users can send money to 66 banks in India, including State Bank of India, ICICI Bank, Punjab National Bank, Andhra, Bank of Baroda, Bank of India and others.
PayPal’s fourth-quarter results on Wednesday (Feb. 3) showed payments volume of $277 billion across 4.4 billion transactions. Year on year, dollar volume grew 39 percent and the transaction count went up by 27 percent.
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