The American giant PayPal is shutting down its domestic business in India, less than four years after it kickstarted local operations in the world’s second largest internet market. Instead, it will focus on scaling up its existing cross-border trade business for small enterprises, to gain a significant share of the country’s rapidly growing export market.
This FinTech enterprise’s domestic operations include its payments gateway and aggregator services for online merchants and brands. The move away is expected to streamline operations in the country’s highly competitive digital payments market.
“From April 1, 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 April 1,” said a company spokesperson.
The Palo Alto, California-based company will soon start a restructuring exercise and, from February 6, will start notifying Indian merchant partners who avail of its gateway services about plans to terminate contracts by April 1.
PayPal’s Indian operations are largely classified into two parts: One focused on enabling payments for domestic brands such as Myntra, Swiggy, BookMyShow through the gateway services; the second unit focuses on cross-border remittance services for exporters and small businesses.
“It made sense to us to do one thing right, which is our cross-border trade business, rather than to focus on multiple businesses… we can’t do everything here,” the spokesperson added. “From 1 April, we won’t be offering Payment Gateway and Aggregator services here. We are ensuring that this process is smooth for our customers and employees here.”
The move comes as a surprise, nonetheless. Last year, the company said that it was building a payments service powered nu India’s UPI railroad, suggesting an increase in the level of investments it was making in the country.
Over the years, PayPal also partnered with a range if popular businesses such as ticketing services BookMyShow and MakeMyTrip, and food delivery platform Swiggy to offer a faster check-out experience. Currently, PayPal India’s website appears to have removed all such references.
India has emerged as one of the world’s largest battlegrounds for mobile payment firms in recent years. Various heavily backed firms including Paytm, PhonePe, Google, Amazon, and Facebook are competing amongst one another to increase their share in India, where the market is estimated to be worth $1 trillion by the year 2023. Several of these firms also offer a range of payment services for merchants.
PayPal, the company which says it processed $ 1.4 billion worth of international sales for merchants in India last year, added that it 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’.