Hyderabad: The Indian e-commerce market may be booming with a number of local players seizing the opportunity to bolster their presence in the online payments segment, but eBay Inc-owned online payment platform PayPal Inc. is yet to decide on its re-entry into this market.
While PayPal launched its service in 10 more countries this month, taking the number of markets it is present in to 203, it is yet to decide on its plans for India.
“It’s on the plans, but (I) can’t give you a definite answer to announce that this is the timeline or strategy at this point,” Sam Hamilton, vice- president of data technology at PayPal, said in an interview in Hyderabad.
Owned by eBay, PayPal moved out of India in phases because of Reserve Bank of India (RBI) regulations that treated it as a quasi-financial body since it offers services like the online wallet that allows users to store money in the online account.
RBI wanted PayPal to transfer the money to banks within a pre-determined timeframe instead of holding the money in its online account. In effect, it only allowed PayPal to function as a payment gateway, limiting the scope of its platform.
“RBI placed some restrictions because they didn’t want frauds to happen,” Sangeeta Singh, senior vice-president of industry lobby Nasscom said, adding, “I think these issues will be sorted out. They must be working on it. It is good for everybody. Small entrepreneurs need to sell everywhere.”
PayPal executives did not disclose specific reasons behind its delayed entry to India.
Meanwhile, Internet firms such as Flipkart, Snapdeal, One97 Communications Ltd, Avenues India Pvt. Ltd, TimesofMoney Ltd and Ibibo Group, have floated digital wallets and payment gateways and integrated them with the websites of different consumer brands.
In February, Ibibo sold its PayU online payment system to South Africa-based Naspers MIH, which is in turn, an investor in Ibibo. Avenues India runs CCAvenue, one of the early entrants in the payment gateway market, while One97 Communications’ PayTM, TimesofMoney’s DirecPay and Citrus are the other significant players.
PayPal’s entry into the Indian market is keenly awaited by its Indian employees, who build different units of the payment platform and generate analytical insights for its merchants out of its Bangalore and Chennai offices, executives said.
Paypal’s Chennai office is its biggest development centre worldwide.
In the interim, under Hamilton’s leadership PayPal is also working on analytics platforms to prevent fraud on a real-time basis.
It has invested “heavily” in solutions that can detect anomalies such as inconsistent transactions and unrealistic transactions.
Hamilton, who oversees data technology at PayPal’s headquarters in San Jose, California, said PayPal’s 148 million global users are a huge opportunity for Indian merchants in terms of cross-border trade. About 25% of PayPal’s global business was cross-border trade.
Today, its payment platform operates on some websites in India but users can only pay for overseas online shopping and merchants can receive payments from overseas buyers. Transactions within India are not allowed.
The company is relying on its strong global standing to conquer the Indian digital payment market when it eventually makes an entry.