US-based online payments system provider PayPal is reported to have begun scaling down its domestic business in India, as it is believed to have incurred significant losses from its domestic payments business.
Reportedly, PayPal has told its card network partners that the company is ‘pausing’ its domestic business, and will stop onboarding new merchants from March 2021.
In response, PayPal told Inc42, “We do not comment on rumours or speculation. We are focused on strengthening India’s digital economy with PayPal’s global payment platform. Our largest workforce outside of the US is based in India, and it continues to be a priority market for PayPal.”
In a response to The Morning Context, which first reported the development, PayPal’s head of communications in India denied the news and said that the company is merely restructuring its business priorities in India, due to which, some of the existing roles are becoming redundant.
According to The Morning Context report, third-party staffing agency Adecco, which had several of PayPal’s India employees on its payroll, made an announcement for PayPal’s laid-off employees saying, “PayPal has stopped the project here in India, and they do not want your services anymore. So, we are closing this project with PayPal.”
Long considered the ‘original’ digital payments company, PayPal has been facilitating transactions since the early 2000s in the US, as well as cross-border transactions, which it subsequently launched in India too in 2007. PayPal was slow off the blocks when it came to entering the Indian online domestic payments market, especially with UPI taking over in recent years.
PayPal only entered India’s domestic digital payments market in November 2017, one year after the Indian government had demonetised nearly 85% of the currency in circulation at that time. Sensing the opportunity, PayPal began processing domestic payments in the country. However, the market, by then, had gotten cluttered with several players such as BillDesk, PayU and Razorpay processing payments, while Paytm had come to the fore as a digital wallet, besides the multitude of third-party payment apps on the unified payments interface (UPI) network.