US-based digital payments company PayPal has announced its plans to close its domestic payments business operations in India, from April 2021.
PayPal has been offering its payment gateway to Indian brands and online merchants, along with international remittance services for small and medium enterprises.
The firm entered the Indian domestic payment services business four years ago and currently serves as a payment option for more than 300,000 merchants in the country.
With the closing of operations in India, the San Jose, California-based firm intends to focus on its cross-border payments business, enabling global customers to pay Indian merchants.
PayPal spokesperson said: “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 said that the Indian mobile payments market is very competitive, with tech giants like Facebook, Google, Amazon and TenCent contesting for market share, along with local players including PhonePE and PayTM.
PayPal’s decision to withdraw from India follows the company’s record results driven by new products, including cryptocurrency payments and buy now, pay later services.
The company’s total payment volume increased to $936bn and reported a 22% increase in net revenues to $21.45bn, as Covid-19 pandemic forced a shift to e-commerce.
The spokesperson added: “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.
“In fact, PayPal processed $1.4 billion worth of international sales for over 360,000 merchants in India last year.
Furthermore, PayPal has received a civil investigative demand (CID) from the Consumer Financial Protection Bureau over allegation of unauthorised fund transfers and collections processes by its P2P app Venmo.
Venmo is a mobile application designed for person-to-person payments in the US.
