Digital payments in India have been on a rise since demonetization took place in the year 2015. The countries acceptance of digital payments has been massive. The applications such as Paytm, PhonePe, and GooglePay have reached the remotest part of the country. This was because of the sudden change in the currency notes in India. Most of the Indians are used to the digital payments and they trust the applications with their money.
The major reason for this is the National Payments Corporation of India’s UPI (Unified Payments Interface). UPI is an interface which link external applications and the bank accounts and the interface being government developed, people find it appropriate to trust. Applications like PhonePe and GooglePay use UPI and those are the two most used digital payments applications in India. In that case, the world’s largest payments application PayPal has finally given India a chance.
PayPal is very cunning, it has studied that digital payments market in India is going to be huge in the coming years. It is going to increase five times of its current value. Currently, the digital payments market stands at $200 billion and that is going to rise to $1 trillion, which is five times in as many years. This has triggered the company to increase its domestic application development. It will take time as there are much-settled payments applications in that segment.
In spite of all the talk, PayPal is not new to India. It has operated in India for almost a decade but was mostly working as an inter-continental or cross-border transactions. Since it was present in India, it had all the necessary information required and just had to launch its domestic services. It did the same and inaugurated its domestic application in November of 2017. It has since managed to gain a lot of ground and is not far behind compared to its competitors.
Its numbers are amazing, to say the least. The application has managed to rope in good numbers in all departments. Its revenue grew eleven times in FY18 from FY17. Previously it stood at $2.98 million which is about INR 21 Cr and then grew to a stunning $36.9 million which is about INR 260 Cr. This is the revenue side of things. The profits also increased and so did the expenses. Profits in Financial year 17 stood at $3.16 million which turned into $37.1 million in FY18 which is almost ten times the previous year.
The company had to burn a lot of money as well because of the employees it hired. The expenses grew from $2.16 million to $4.65 million which is more than double. However, the company is not bothered by the same because they have much bigger plans for India. In 2018, the company planned and increased its employee count by 600 people. The company also revealed that it is growing 20% Y-o-Y. The market capitalization of PayPal is around $88 billion which is not that big compared to the market. That said, it is looking to localize the technology so that they can increase that number and share the majority of the market when the number hits the trillion mark by 2023.
– Unmesh Phule