Russia Launch Gives PayPal Access to Hot Market (Sept. 4, 2013)
Sept. 4, 2013
PayPal Inc. is opening for business in Russia, now that the San Jose, Calif., payment giant has overcome the regulatory barriers to fully operating in the country. According to a report in the Moscow Times, PayPal will begin enabling account holders to transfer funds to Russian banks in rubles starting on Sept 17. The company previously had been barred from enabling transfers into Russian bank accounts because of a law passed in 2011 that required all e-commerce providers to be licensed by the country’s central bank. After more than two years in the works, PayPal’s application for a non-credit banking institution license was granted in March.
Russia represents a significant opportunity for PayPal to expand its online payment business. The country’s e-commerce market grew by nearly 20 percent in the second half of 2012—five times higher than the average growth rate for European countries during that period—and is projected to reach $25 billion by 2016, according to the Global Web Index. The company also is looking to bring its rapidly growing brick-and-mortar presence to Russia too, seeking to enable in-store payments via PayPal accounts, according to the Moscow Times report. PayPal parent company eBay Inc. 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 in March.