PayPal Receives License to Operate in Russia (March 18, 2013)
March 18, 2013
PayPal Inc. has received approval from regulators in Russia to operate as a non-credit banking institution in the country, which paves the way for the e-commerce giant to begin operating a domestic payments business in a market the company considers to be one of its biggest growth opportunities.
The news initially was released last Wednesday on the blog of PayPal parent company eBay Inc., but was pulled soon after it was posted. On Friday, however, a post on PayPal’s own blog confirmed that the company had been granted a license from the Central Bank of Russia. The application has been in the works for more than two years, according to the initial eBay blog post.
“In this global environment, Russia is definitely one of the biggest growth opportunities for PayPal, with 40 million online shoppers and already more than $13 billion spent online in 2012,” wrote Laurent Le Moal, general manager, Continental Europe, Middle East and Africa, in a PayPal blog post. Parent company eBay has been stepping up its business in Russia since launching a Russian version of its Website in 2010. In the first 10 months of 2012, eBay saw an 82 percent increase in the number of its active Russian customers, the company said.
PayPal’s own global operations also have been an area of rapid growth, with international business accounting for more than 50 percent of the company’s revenue for the past four quarters, noted Le Moal, who added that year-over-year international revenue growth was 26 percent in the fourth quarter of 2012. In February, PayPal entered the crowded European mobile payment card reader market with the expansion of its PayPal Here reader to Europe, beginning in the U.K. this summer. A year ago, reports surfaced that the company was in talks with Russia’s state-run postal system to issue prepaid cards for purchases on eBay and other online merchants.