PayPal Holdings, Inc., the digital payments company, has separated from eBay, the e-commerce company that acquired PayPal in 2002. It is now an independent public company trading on the Nasdaq under the ticker symbol ‘PYPL’.
In a roundtable discussion with journalists here, Anupam Pahuja, General Manager-Technology, PayPal Asia Pacific, discussed PayPal’s independence as well as its operations in India.
“We fundamentally want to re-imagine how people want to manage and move their money,” Mr. Pahuja said, adding that the payments industry would change more in the next five years than it had in the last 50 years and cited three reasons for this. One, the lines between commerce and e-commerce are getting increasingly blurry as consumers are able to compare potential purchases in front of them with numerous competing options online. This is causing a second phenomenon, where the power base is shifting from the merchant to the consumer. Thirdly, paper currency is becoming obsolete.
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“It won’t be long before you can make a digital payment to the guy who delivers milk to you, the guy who delivers newspapers to you, etc,” he said. The company’s separation from eBay will allow it to focus exclusively on the payments business, giving it more freedom to pursue partnership arrangements with merchants without the complication of being owned by eBay.
PayPal was bought in 2002 by eBay for $1.5 billion, and has a market cap of upwards of $49 billion today. The company has captured about 8 per cent of the $750 billion online transactions market, had 169 million customers, according to figures just in for the second quarter of 2015. About 22 per cent of PayPal’s revenue comes from eBay, while 80 per cent of the latter’s payment volumes are through PayPal. eBay has guaranteed PayPal this share of its payment volume for the next five years, according to him.
Ten percent of PayPal’s workforce is India-based, which employ a total of 1,300 people. The workforce in India is not a back-office operation but core to the company’s business – working in areas such as global reporting, settlements, services and operations.
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“PayPal’s largest centre of technology is in India today. It will grow in the foreseeable future,” Mr. Pahuja said.