PayPal is closing its domestic business in India less than four years after the American giant launched its local operations in the world’s second-largest Internet market. PayPal, instead of San Jose, California, will focus on its cross-border payment business, which means customers around the world will still be able to pay Indian merchants using the service.
“From April 1, 2021, we will focus all our attention on enabling more international sales for Indian businesses and moving away from our domestic products in India. This means we will no longer provide internal payment services in India from April 1,” said a company spokesperson.
In October last year, PayPal said it would allow customers to hold Bitcoin and other virtual coins in its online wallet and allow 26 million merchants on its network to shop using cryptocurrencies. The new service makes PayPal one of the largest companies in the United States to provide buyers with access to cryptocurrencies, which could help Bitcoin and rival cryptocurrencies become more sustainable payment methods.
San Jose, a California-based firm, hopes the service will encourage the global use of coins and prepare a network of new digital currencies that central banks and firms can develop, President and CEO Dan Schulman said in an interview. “We are working with central banks and thinking about how all kinds of digital currencies and PayPal can play a role,” he said.
Indian media outlet The Morning Context reported in December that PayPal was abandoning its local payment business in India, a claim the agency dismissed. “With the change in priorities, some PayPal employees have been hired. Our focus is to minimize the impact on our people whenever possible. Overall, our workforce in India is growing, not shrinking. We are currently hiring a lot of people on our sites in India,” a spokesperson told TechCrunch.
Still, the move comes as a surprise. The company said last year that it was creating a payment service run by India’s UPI Railways, which suggested increasing the amount of investment in the country. Over the years, PayPal has collaborated with popular Indian businesses such as ticketing services BookMyShow and MakeMyTrip and food delivery platform Swiggy to provide a quick checkout experience. At the time of writing, PayPal websites in India seem to have removed all such references.
India has recent years emerged as one of the largest battlefields in the world for mobile payment companies. Several heavily backed companies, including Paytm, PhonePe, Google, Amazon and Facebook, are competing with each other to expand their stake in India, where the market expected to reach $1 trillion by 2023. Most of these companies also provide a range of services for merchants.
The company, which said it processed $1.4 billion in international sales processing for merchants in India last year, added that it, would “continue to invest in product development that will reach approximately 350 million PayPal customers worldwide, increase their sales internationally, and Help India’s economy recover.” PayPal has been providing financial assistance at the border in India for more than a decade. Upon entering the country, it allows Indian customers to make payments to online merchants, including local currencies.