Global digital payments player PayPal is expected to offer domestic payment services in India from next week, as per sources close to the development. With its new service in India, PayPal is expected to act as a payment aggregator and work with banks to offer digital payment services to its customers.
The source stated that PayPal has tied up with a dozen merchants to start off operations in India, wherein during the online checkout process customers will be shown the PayPal payment option. PayPal, with its set of expertise, could also drive digital payments at merchant locations, which are still predominantly card or cash.
However, an email query sent to a PayPal spokesperson elicited the following response, “The story is speculative and PayPal does not comment on market speculations and rumors.”
PayPal And The Exploding Digital Payments Space In India
For now, PayPal is operational in India only for cross-border payments for small merchants, entrepreneurs and freelancers selling goods and services abroad. In August 2016, it announced the launch of PayPal.me – a new peer to peer payment feature which allows users to receive payment via the click of a link in a fast, convenient and personalised way.
If the development proves to be true, it will see yet another global player entering the digital payments market in India which is getting overcrowded with domestic and global companies. If PayPal brings in its domestic payment services, then it would have to battle market leader Paytm, along with players like Google’s Tez, WhatsApp, Flipkart-owned Phonepe, Mobikwik, and Amazon Pay.
Unlike India, in the US, the company has an expanded suite of offerings, including a payment gateway business, peer-to-peer payments, merchant payments, remittances, and retail offline transactions. The company also has a credit product there named PayPal Credit.
In India, however, it might only introduce merchant payments, to begin with. While it has not applied for a prepaid payments instrument (PPI) licence from Reserve Bank of India to operate a digital wallet, but it could use the Unified Payments Interface infrastructure through banks to facilitate domestic payments.
The global player has slowly been adding to its repertoire in India. Strengthening its leadership team in India, last year the company appointed its former technology head for Asia-Pacific, Anupam Pahuja, as its Managing Director for India. In July, it hired LendingClub’s former vice president of finance, Gunjan Shukla, as Chief Financial Officer for its India business. This was followed by the appointment of Siddharth Dhamija, previously Chief Growth Officer at Razorpay, as its head of growth and large merchant acquisition in India in September.
The digital payments player also grabbed headlines when it was said to be in the race to acquire 25% stake in FreeCharge for $200 Mn in December 2016. In August this year, it has announced the launch of two Technology Innovation Labs at the Chennai and Bengaluru Tech centres. The lab is the first by PayPal in India and the third after US and Singapore.
If PayPal does bring its entire range of payments services from North America to India, Indian audience will have yet another secure and safe way to make digital payments. And it will become yet another contender in the hotly contested digital payments turf in India, which as per the recent Google and Boston Consulting Group report, is projected to reach $500 Bn by 2020, contributing 15% to India’s GDP.