PayPal is withdrawing its domestic payment business in India from April 1, the California-based online payment giant said in a statement on Friday, February 5. The company will instead focus on its cross-border payments business in India. This will allow PayPal users around the world to pay Indian merchants using its platform.
“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,” the company said.
PayPal issued a long statement which, however, doesn’t explain why the payment firm was shutting down its business in India. A report indicates the reason behind PayPal’s decision was that the company was struggling to make inroads in the country.
Though the reason is not clear yet, the big news is still a surprising one. PayPal had launched its domestic services in India only some three years and a few months ago, back on November 8, 2017. Before that, the company had been only offering cross-border payments services, but after entering the country, it also facilitated consumers in India to pay at online platforms with Indian currency.
PayPal was a payment tool on many popular Indian business apps such as ticketing service MakeMyTrip, online film booking app BookMyShow, and food delivery service Swiggy.
The company had revealed, in 2020, that it was building a payment service powered by India’s UPI railroad. It suggested the company was increasing its investments in the country with the world’s second-largest internet user base.
India also has one of the largest online shopping populations. Big companies such as Amazon, Google, Facebook, Paytm and PhonePe, some of which offer payment services, are increasing their share in the country. The country’s market is estimated to have a value of $1 trillion by 2023.
“With the shift in priorities, some PayPal employees have been reassigned to new teams. Our focus is to always minimize the impact on our people whenever possible. Overall, our workforce is growing in India, not reducing. We are currently recruiting across our sites in India in large numbers,” a spokesperson from the company said.