PayPal, a US-based online payment system provider, has reportedly begun to scale down its domestic business in India because its domestic payments business is said to have caused substantial losses in the recent years.
PayPal Holdings Inc, the leading American digital payments company, said on Friday that it would shut down its home payment services in India from 1 April. The company has announced that they will seek to rationalize their priority on allowing cross-border payments of SMEs. India is one of the most competitive digital payment markets, with several players, including Paytm, PhonePe, Google, Amazon, and Facebook.
PayPal is shutting down?
“We will concentrate on allowing more foreign sales for Indian companies and shifting our focus from our domestic products in India from 1 April 2021. That means that from 1 April, we will no longer be providing home payment services in India,” a spokesperson for the company said.
PayPal said that its priorities were changing in India in a statement, but it did not explain why they had concluded it. The business, which has amassed over 360,000 traders across the world, has recently said in a study that it has been attempting to make ventures in India.
The Morning Context announced in December that PayPal was leaving the local Indian payment market, a claim that the company had at the time refuted.
“Some PayPal staff have been redirected to new teams with the change in priorities. Our emphasis is on mitigating the impact on our workers as much as possible. Overall, our employees in India are increasing, not declining. We currently hire a large number of our Indian employees,” a TechCrunch spokesman said.
However, it is a surprise to travel. The company said it was developing a payment service driven by UPI railroad in India last year, indicating an increase in its investment in India.
Effects on the Indian market
Over the years PayPal has also partnered with many significant companies in India, such as BookMyShow, MakeMyTrip and the Swiggy Food Services Network to provide people with smoother checkout experiences. The PayPal website in India seems to have removed all these references.
India has emerged in recent years as one of the world’s largest mobile payment companies. Many highly backed companies, including Paytm, PhonePe, Google, Amazon, and Facebook, compete for a $1 trillion market in Indian markets by 2023. Many of these companies also provide commercial payment services.
The company said last year that the foreign revenues for traders in India were $1.4 billion and will continue to invest in “product production to enhance Indian enterprises worldwide reaching close to 350 million PayPal customers, improve their sales worldwide, and help India’s economy return to growth.” The company added.
PayPal significant role in Indian market
PayPal, a long-established digital payments firm, facilitated both transactions in the US and trans-border transactions since the early 2000s and launched it in India in 2007. When PayPal entered India’s domestic online payments, UPI has emerged as the most significant gateways for payments over recent years.
For over a decade, PayPal has provided funding for cross-border payments in India. After entering India, consumers in India had been permitted to pay local currency to online merchants.
Just one year after the Indian government demonetized almost 85% of its current local currency in November 2017 entered the domestic market for digital payments in India. PayPal started to process domestic payments in the country to gain a boost of opportunity.
The sector, however, had become embarrassed with several players, including Bill Desk, PayU, and Razorpay, handling payments, while Paytm was at the forefront as a digital wallet, in addition to the multitude of third-party payment apps on the UPI network.