After more than two years of launching its operations in India, global remittance services provider PayPal is planning to enter UPI-based payments service in the country.
PayPal will join the likes of global companies such as Google, Amazon, WhatsApp and Xiaomi, and homegrown companies like PhonePe and Paytm in the UPI ecosystem.
According to a Business Standard report, PayPal is in the last leg to roll out peer-to-peer digital payments service and it may go live in the coming months.
This will be a major step towards consumer payments in India by PayPal, which facilitates cross-border payments for small merchants, entrepreneurs, and freelancers selling goods and services abroad.
With over 3,500 staff across offices in India, PayPal has maintained an improved balance sheet with a 2X increase in revenue against nominal losses in the last fiscal.
As far as UPI’s growth is concerned, the segment has already become overcrowded and hyper-competitive in the past couple of years.
While it’s not clear whether PayPal would push its UPI-enabled service aggressively, it’s likely not to compete with deep-pocketed players as it will cost a lot.
PayPal could rely on organic growth, similar to the strategy of Xiaomi.
Recently, WhatsApp Pay had reportedly obtained National Payments Corporation of India or NPCI’s nod for phased rollout for 10 million users. However, data localisation and other government norms have made it difficult for global companies to launch UPI-based payments service in the country.
Like WhatsApp, PayPal will also have to go through a similar screening process by the central bank and NPCI for a full-fledged rollout of peer-to-peer payments.
After the waiving off of MDR fee, the regulatory body is also set to remove PSP and interchange fees. The move would leave UPI apps with no scope of making money from P2M transactions. Since PayPal is reportedly looking at P2P segment only, it’s not likely to be affected by the abolishment of the aforementioned fees.