PayPal announced that it has launched domestic operations in India, which means it will be taking on China’s Alibaba-backed Paytm, the country’s leading digital payments firm.
According to a Reuters news report, the government of India’s push for cashless transactions is leading more people to use e-wallets and card payments.
“India is transitioning away from our biggest competitor – cash – and our digital platform and technology has immense scope to enable this at scale,” said Anupam Pahuja, country manager and managing director of PayPal India. “For us, the marathon has just begun.”
Earlier this year, a study from PayPal that polled some 4,000 consumers across India, China, Hong Kong, Singapore, Thailand, the Philippines and Indonesia found that approximately 57 percent of respondents cited cash as their preferred payment method for daily purchases.
One reason for the cash preference is that consumers in the region do not yet clearly understand how different payment systems work. In addition, many find the initial setup of creating a digital wallet to be complex, and are concerned about the privacy of their financial records.
Still, the online payment industry is pegged to grow ten-fold to $500 billion by 2020. With that in mind, Google also launched a localized payments app for India in September.
PayPal, which was co-founded by Elon Musk, will allow Indian consumers to use the platform to shop online at some of the country’s most popular businesses.
Merchants accepting PayPal will also be able to process both local and global payments, getting access to the payment processor’s more than 218 million customers around the world and in India.
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