PayPal will shut India operations for payments gateway and aggregator services for merchants and brands this year, and instead scale-up cross border trade business for small enterprises, a spokesperson told The Economic Times.
The focus move is aimed at streamlining operations in the country and gaining a “significant share of the inward remittances market,” the report noted.
Moneycontrol could not independently verify the report.
The California-based digital payments company will undertake a restructuring exercise and from February 6, Indian merchant partners will be notified about “plans to terminate contracts by April 1,” the source said.
They added that the company has looked at ways to “protect business and optimise growth here since early days of the pandemic” and “decided we are best placed focusing on enabling cross-border trades and exports” as the way forward after thorough analysis.
The spokesperson said that focusing on “doing one thing right rather than multiple businesses” made sense, they however added that while payment gateway and aggregator services will end from April 1, the company will keep operations “live” for dispute resolution and refunds.
“While the domestic payment service will have run its course by the end of the current fiscal year, we are ensuring that this process is smooth for our customers and employees here,” they said.
PayPal’s inward remittances grew by 22 percent to $1.4 billion in volume in 2020 largely backed by edutech, fashion and wellness sectors. It will face “stiff competition” from MoneyGram and Western Union in the cross-border business.
Responding to the report, a spokesperson for PayPal told Moneycontrol: "We believe PayPal can have the greatest positive impact in India’s economic recovery by pivoting our business to support our customers where they need us most. From 1 April 2021, we will focus all our attention on enabling more international sales for Indian businesses, and shift focus away from our domestic products in India. This means we will no longer offer domestic payment services within India from 1 April."
"PayPal is committed to doing all we can to help Indian businesses during these challenging times. The critical role our global payments platform plays in India has only been magnified by the pandemic. In fact, PayPal processed $1.4 billion USD worth of international sales for over 360,000 merchants in India last year. We will continue to invest in product development that enables Indian businesses to reach nearly 350 million PayPal consumers worldwide, increase their sales internationally, and help the Indian economy return to growth," the statement added.