PayPal's India Pay to open for business in a week
With its new service in India, PayPal will act like a payment aggregator and work with banks to offer digital payment services to its customers.
Last Updated: Nov 02, 2017, 07.50 AM IST
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PayPal, which has established a local subsidiary , would have to battle market leader Paytm as well as Google's Tez, Facebook's WhatsApp, Flipkart-owned Phonepe, and Amazon Pay for a share of India's retail payments pie.
"PayPal has tied up with a dozen merchants to start off their operations in India, where during the online checkout process customers will be shown the PayPal payment option," said one of the persons familiar with the development.
Currently, PayPal is operational in India only for cross-border payments for small merchants, entrepreneurs and freelancers selling goods and services abroad. From next week, customers will be able to download the PayPal application and use it to make online payments for goods and services within the country as well.
PayPal has an expanded suite of offerings in the United States, 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, it will only introduce merchant payments to begin with.
A PayPal spokesperson declined to comment on the company's India plans. With its new service in India, PayPal will act like a payment aggregator and work with banks to offer digital payment services to its customers, the people mentioned above said. It has not sought a prepaid payments instrument (PPI) licence from Reserve Bank of India to operate a digital wallet, but could use the Unified Payments Interface infrastructure through banks to facilitate domestic payments, they said. PayPal is expected to bring its entire payments suite from North America to India gradually and could look for acquisitions, these people said. "What a player like PayPal will bring is buyer security and safety, which will be a huge positive for the Indian consumers," one of them said.
PayPal has strengthened 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. And in September, PayPal appointed Siddharth Dhamija, previously chief growth officer at Razorpay, as its head of growth and large merchant acquisition in India. The opening up of PayPal for domestic payments will also allow Indian customers travelling abroad to use the same application to make payments abroad.
"PayPal, with its set of expertise, can also drive digital payments at merchant locations, which is still predominantly card or cash," said the first person quoted above. “As of now, UPI adoption has primarily been for peer-to-peer payments."
After demonetisation of high-value currencies a year ago, India's digital payments ecosystem has received a huge boost with various global companies jumping in. Samsung Pay was introduced in India this year and Apple Pay is set to roll out here shortly.
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