PayPal is shutting down its domestic business in India, less than four years after the American giant kickstarted local operations in the world’s second-largest internet market.
“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,” said a company spokesperson.
In a long statement, PayPal said its priorities had shifted in India, but did not elaborate why it was winding down the business. A report recently said the company, which has amassed over 360,000 merchants in the country, was struggling to make inroads in India.
Indian news outlet The Morning Context reported in December that PayPal was abandoning its local payments business in India, a claim the company had refuted at the time.
"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 told TechCrunch.
Nonetheless, the move comes as a surprise. The company said last year that it was building a payments service powered by India's UPI railroad, suggesting an increase in the level of investments it was making in the country.
Over the years, PayPal also partnered with a range of popular Indian businesses such as ticketing services BookMyShow and MakeMyTrip and food delivery platform Swiggy to offer a faster checkout experience. At the time of writing, the PayPal website in India appears to have removed all such references.
India has emerged as one of the world's largest battlegrounds for mobile payments firms in recent years. Scores of heavily-backed firms, including Paytm, PhonePe, Google, Amazon and Facebook, are competing to increase their share in India, where the market is estimated to be worth $1 trillion by 2023. Several of these firms also offer a range of payments services for merchants.
The company, which says it processed $1.4 billion worth of international sales for merchants in India last year, added that it 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.”
PayPal has been offering cross-border payments support in India for more than a decade. After entering the country, it allowed consumers in India to pay at online merchants with local currency.
The story was updated with additional details provided by PayPal.