PayPal sees a twelvefold boost in revenue in India

, Internet, Retail, Tarjetas y Pagos Electrónicos, Telecomunicaciones

Revenue from PayPal’s India business grew twelvefold during the 2018 fiscal year to reach Rs 260 crore ($37 million), up from Rs 21 crore ($3 million) during the previous year, according to The Economic Times.PayPal Total Payment Volume (TPV)By comparison, PayPal saw 14% annual revenue growth to total $3.68 billion in Q3 2018 and will likely see consistent results when it posts Q4 2018 results.
PayPal’s growth strategy in India could serve as a blueprint the firm can implement to launch or scale in other markets.

  • PayPal launched its domestic product in India in late 2017 after nearly a decade of offering cross-border payments in the region. Establishing domestic operations enabled consumers to make online transactions and merchants to process both local and global payments through the platform, giving them access to PayPal’s 254 million customers globally and in India through a single integration. And PayPal hired 600 tech experts for its innovation lab in India, demonstrating its commitment to establishing a presence as a leader in the market. To deepen its footprint in the region, in June 2018, PayPal contributed to a $125 million funding round for Pine Labs, an Indian point-of-sale terminal provider, which can allow PayPal to reach Indian merchants through multiple avenues, like in-store, where it hasn’t yet established a presence. Pine Labs counts about 300,000 POS terminals and aims to reach 1 million payment-acceptance points in the next five years, and as that network grows, it will create an even bigger opportunity for PayPal. This can ultimately be a good investment for PayPal given that India has low POS penetration — 90% of merchants accept only cash — and therefore has a need for solutions.
  • PayPal can grow its global user base and total payment volume further by implementing this strategy in other markets. Launching domestically after offering its services to a market has paid off for PayPal in India so far, as it had the opportunity to evaluate its performance in the market before investing heavily to launch there. The firm could yield the same results in other markets by replicating this approach. Further, partnerships and investments in big domestic companies in areas with a lot of room for growth — like the POS market — allows PayPal to carve out a place for itself in a market with high growth potential, rather than position itself in direct competition with other players pursuing the same space. Given PayPal’s recent acquisition tear — it recently set aside about $3 billion annually for acquisitions — future strategic investments and acquisitions are likely part of PayPal’s plan in India. Moving deeper into a market that’s poised for rapid growth could allow PayPal to continue to grow volume: PayPal hit a record high $143 billion in total payment volume in Q3 2018 and grew its user base by 15% annually, marking its most added users ever during a single quarter.

Source: Business Insider Intelligence

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