Mumbai : Digital payments in India saw a quantum jump after India demonetised high-value currency notes a year ago. The government’s push towards cashless transactions saw digital payment players post a spurt in business. And then came in questions on the safety and reliability of systems. This is where global payment major PayPal hopes to carve out a niche for itself in India and attain the top slot in three years.
The prepaid payment instruments space in India is cluttered with payments banks, payment gateways and even government-backed platforms like Unified Payments Interface. Undeterred by rivals, Anupam Pahuja, Managing Director and Country Manager for PayPal’s India operations, plans to do “whatever it takes to get there (the top slot)”.
“Anybody can write a code or a piece of feature and say I will move money from here to there. What we bring to the table is very different, which is a reliable system, that is extremely safe and secure on which people can do all their businesses,” Pahuja told Cogencis in an interview. Though the California, US-headquartered firm has been servicing offshore payments in India for a decade, it launched the domestic payment services in the country only on November 8, on the first anniversary of demonetisation, after securing a licence from the Reserve Bank of India (RBI). Asked about the decade-long wait to launch domestic operations in India, Pahuja said the company was assessing problems faced by merchants and demand from domestic customers. “We have heard of a lot of problems from merchants,” Pahuja said. “My system is going down. I have three gateways… during the Diwali sale, my systems crashed. All the things they were talking about were real examples Iheard myself.”
By bringing PayPal’s globally-recognised expertise in the payments space, Pahuja believes merchants will be able to access a reliable and secure payment system. In India, PayPal offers features such as one-touch pay, buyer and seller protection, free return-shipping, and a 180-day dispute resolution window. He said PayPal, through its global expertise in the payments space, can ensure that the merchant delivers what he promises and the customer payment comes through on time.
“The focus is be in India, make in India.” If that means leveraging on existing systems such as Unified Payments Interface or using the fairly popular ‘QR’ or quick response code payment mode in India, then PayPal will do so, he said. “And if we look at small businesses, they don’t invest in technology and why should you ask them to?,” said Pahuja. “Because they are barely making ends meet. The lowest cost you could deliver is via QR (code) – if QR happens to be the lowest cost technology, so be it.”
Pahuja is “very bullish” on the Unified Payments Interface that allows instant transfer of funds in India, which he says still sees a lag in the US.
PayPal, a payments only company, has been providing cross-border payments in India for almost a decade, and claims to handle one-third of the country’s business-to-consumer exports.
The State Bank of India (SBI) is PayPal’s biggest partner bank in India, as a third of the all e-visa payments that come to India happen via PayPal and are processed by the SBI. More partnerships are in the offing, Pahuja said. PayPal has already tied up with Citibank as a nodal bank, and with ICICI Bank as an acquiring partner. Another partnership that is already in place is the one with the RBI’s subsidiary Reserve Bank Information Technology, or ReBIT, which manages information technology requirements.
Pahuja said PayPal is also open to inorganic growth opportunities in India, as it is a model that the company has successfully followed globally.
“We do a lot of acquisitions. So wherever it is additive to our business, wherever it brings competitive skills to our business, we will definitely do acquisitions. We will do that wherever it makes sense, including India.”
