Four years after it kickstarted its money transfer and exchange operations in the second largest internet market globally, India will no longer have access to the American giant's domestic business due to the PayPal shutdown in the country.
According to the company spokesperson, the PayPal shutdown will take effect locally in India starting April 1, 2021. They will focus their attention on enabling more international sales for Indian businesses and shifting their focus away from India's domestic products.
It means that PayPal will no longer offer domestic payment services within India, the spokesperson added.
According to the American giant's statement, their priorities had shifted in India, but it did not explain why the business's winding down, Payments Journal reported.
Moreover, a recent report regarding the company, which has accumulated more than 360,000 merchants in the Indian nation, stated it struggled to make inroads in the country.
Based on a December report of The Morning Context, an Indian news outlet, PayPal was abandoning its local payments businesses in India. However, the company refuted the said claim at the time.
According to TechCrunch, the spokesperson of PayPal shared that some of their employees have been reassigned to new teams.
Their focus is always to minimize the impact on their people whenever possible. Overall, the spokesperson added that their Indian workforce is growing, and they are currently recruiting across their sites in India in large numbers.
But the PayPal shutdown surprised the Indian market as the company mentioned last year that it was building a payments service powdered by the UPI railroad of India, which suggested an increase in the level of investments it was making in the country.
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Over the years, the American giant also partnered with numerous Indian businesses, including BookMyShow and MakeMyTrip, both a ticketing service provider; and Swiggy, a food delivery platform that offers a faster check out experience.
However, the references have now been removed from the Indian website of PayPal.
India has emerged as one of the world's largest battlegrounds for mobile payment firms in recent years.
The list of heavily-backed firms, including PhonePe, Google, Paytm, Facebook, and Amazon, compete against one another to increase their share in India, where the market is estimated to be worth $1 trillion by 2023.
A number of these firms also offer a range of payment services for merchants.
The company added that it processed $1.4 billion worth of international sales for merchants in India last year. It mentioned that it would continue investing in product development, enabling Indian businesses to reach close to 350 million PayPal consumers worldwide, increasing international sales, and helping India's economy return to its growth.
PayPal has been offering cross-border payments support in India for more than a decade, paving the way for Indian consumers to pay online merchants with their local currency.
Paypal's shutdown in India will profoundly affect the country's economy.