By Chanel Smith, EMEA Editor (@PYMNTS_EMEA)
According to recent reports, global payments company PayPal has finally overcome the obstacles that stood in the way of gaining the right to enter into the Russian online payments market.
In May of this year PayPal reported that it received its Non-Credit Banking Institution license from the Central Bank, which was a strong indication that a commercial launch was imminent. Now, a Vedomosti report says the company will be expanding operations into Russia starting on September 17, 2013.
PayPal customers will soon be allowed to add credit their accounts, and make money transfers to Russian banks in local currency, reported The Moscow Times. The primary reason for PayPal’s presence in Russia is to provide online payments services. PayPal stated that it has future goals to integrate into local shops and restaurants across the country, which would enable Russian consumers to make payments via mobile applications that are linked to their PayPal accounts.
Additionally, PayPal’s entrance into Russia means that it will be given complete access to the country’s eCommerce market—one that has increased nearly 20 percent in the last six months of 2012. The market is growing at an impressive rate especially when compared to the European market, which is growing five times slower than the Russian average. Russian eCommerce sales are predicted to reach $25 billion by 2016, according to the Global Web Index reported in The Moscow Times.
However, competitors of PayPal are less enthusiastic about the expansion, and claim the payments company is not adding anything unique to the market.
Asya Mulkumova, a spokeswoman from competitor Yandex.Money, told The Moscow Times, “In Russia, PayPal doesn’t offer anything new.”
Despite the opinions of various competitors, PayPal can use its familiar brand name and stable global following to help build its customer base in the Russian market.
To read the full article at The Moscow Times click here.
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