It was more than two years ago wherein Paypal, the global digital payments giant decided to launch its operations in India in a full-fledged fashion. Now, the world’s largest online payment platform is reportedly planning to move into the UPI-based payments service in India as well.
Currently, in India, only peer-to-merchant or P2M payments transactions are operational on the PayPal platform via facilities such as net banking and debit or credit cards. They have also enabled international remittances from India.
The launch of UPI transactions by PayPal is being estimated a billion-dollar business in the near future. As of now, PhonePe, Paytm and Google Pay leads the P2P UPI transactions market in India. While few other players are also leaving no stone unturned to capture a sizeable share of the UPI transactions market, startups such as BharatPe are taking an aggregator approach to enable UPI-based peer-to-merchant transactions.
PayPal had entered Indian long back in the year 2007. However, they only resorted to facilitating cross-border transactions until November 2017, which was the year when India’s digital payments industry started growing. Right now Paypal serves as a digital payments partner to several Indian shopping platforms such as Myntra, BookMyShow, Urban Company, MakeMyTrip, among others.
At present, the company is aiming to increase its reach to small and medium businesses in cities and towns which are quite similar to the strategies employed by Paytm and PhonePe currently. Paypal has also started working on a model of cluster workshops across India to further spread awareness about their services. The committee of PayPal to the digital transaction market in India is clearly visible as it participated in a $125 Mn funding round of New Delhi-based payments platform Pine Labs.
UPI In India: The Mega Industry?
In the last three years, Unified Payments Interface or UPI has become the biggest fintech success story in India. It is quite obvious that all major and global tech companies would want to tap this burgeoning segment. Therefore, much like it’s other competitors US-based payments giant PayPal is now looking to launch UPI-based peer-to-peer (P2P) payments feature to add to its presence in the Indian market. However, with the existing heavyweights in this segment such as Paytm, PhonePe, Google Pay and more, it will be quite an uphill battle for the upcoming payments platforms.
In the month of January 2020 alone, a whopping 1305.02 million UPI transactions valued 2,16,212.92 crores were processed by 144 banks.
In the case of PayPal, aiming for UPI-backed payments could also be considered a strategic move to revive their slumped performance in the financial year ending March 31, 2019, in India. Paypal faced 3.5X surge in losses despite 2.5X growth in revenue. At the same time, the company’s expenses grew 1.53X.
UPI Transactions India: Tough Battle
PayPal is not the only new entrant in the UPI market of India. The mobile messaging platform giant WhatsApp is also giving a shot to launch their own UPI-based payments service on their existing platform. WhatsApp was reportedly testing their UPI-powered payments since 2018. However, they suffered a lot of resistance due to obvious roadblocks from competitors, government bodies, and other regulators since then.
It has been reported that earlier this month, the launch of WhatsApp Payments was finally approved to roll out by the National Payments Corporation of India (NPCI), but in a phased manner.
WhatsApp’s Payments platform will be cleared for a full rout one they have checked all the pending compliance points. However, as of right now, under the ‘phased’ roll-out plan, WhatsApp Payments will only be able to offer its services to a handful of 10 million initial Indian users. It has also been reported that Uber is also planning to go the UPI-route. Plans to launch their own digital payments platform called ‘Uber Money’ powered by UPI by 2020 are reportedly in motion.