PayPal mulling entry into India’s mobile wallet space; eyes PPI license

PayPal, the global payments giant, is considering an entry into the highly competitive, yet grossly under penetrated, mobile wallet industry in the country. It is eyeing the Prepaid Payment Instrument (PPI) license to enter the market. However, the global behemoth may have to wait a bit longer since RBI has put a moratorium on fresh PPI licenses until Sept’17 till it frames suitable guidelines for the sector. Amazon though got the license last month to start its own wallet.

Interestingly PayPal was in discussions with other players also to penetrated in the market. It was one of the suitors to buy Freecharge, the payments arm of the beleaguered ecommerce player Snapdeal, but the talks didn’t go through. It is also in discussions to invest in Flipkart’s wallet PhonePe. Although PayPal is currently focused on international remittance, the wallet license will help it increase its local presence in the country. Its India head, Anupam Pahuja, recently commented that “while PayPal has 192 million customers in more than 200 markets across the world, there is no domestic product in India. We are now trying to fill that void”.

Although it is currently easy to operate a mobile wallet business, it will be interesting to see how the new draft rules under consideration by RBI will alter the business. Some players are already complaining about higher customer acquisition cost if the mandatory KYC policy, as thought of by RBI, comes into play.