PayPal India’s total transaction value jumped 40% from a year earlier in the June quarter as small businesses sold goods and services to overseas consumers amid the second covid wave, a top executive said.
Services exports have predominantly led the volume growth, particularly supported by large edtech firms and online tutors, tech freelancers, smaller software-as-a-service (SaaS) platforms and female entrepreneurs in wellness and health segments.
Parent PayPal Holdings Inc., which shut down its local payment services business in April, is entirely focused on international sales for small and medium businesses. PayPal offers its payment gateway to Indian brands and online merchants and provides international remittance services for small and medium enterprises, including exporters, in the country.
In 2020, PayPal India did about $1.4 billion of total payment volume with close to 360,000 small exporters.
“Our focus on cross-border trade and small and medium businesses is paying off. Even when the first wave hit us in 2020, we saw a 25% growth in export volume. Small value exporters, who sell online and to international consumers, continue to grow very fast despite the pandemic. If they use PayPal for payments, their growth is multi-fold. The beauty of digital trade is almost the entire experience is digital except when the goods travel physically, and they assure better margins," Nath Parameshwaran, senior director, corporate affairs, PayPal India, said in an interview.
PayPal India currently works with merchants across 1,500 cities and towns.
In services exports, Indian tech freelancers command the highest per hour billing rates of $80 and are in demand for search engine optimization, setting up websites, remote troubleshooting of IT systems for other smaller businesses, running marketing campaigns with high-end data analytics.
The big engine of growth, however, has been edtech, both large companies as well as individual tutors. Edtech startups, which have set up portals to service overseas consumers, use PayPal to receive payments. Currently, PayPal works with UpGrad, Eruditus, WhiteHat Jr., Toppr, Unacademy, among others.
“The pandemic has opened up big opportunities for Saas companies and a number of small, homegrown platforms are coming up, positioning a need in overseas markets that can be supplied from India. We see big growth potential here going forward," Parmeshwaran said. “We remain very bullish. We want to exceed our target what we have internally set for this year, and we will certainly exceed what we did (payment volumes) in 2020," he added.
The article was first published on Mint
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