When PayPal’s person-to-person payments service PayPal.me launched on Tuesday (Sept. 1), there was (and remains) a pretty substantial consumer region missing from its list: the entire continent of Asia.
It’s a rather curious absence among the launch areas for the mobile-optimized service, given the heavy percentage of Internet users in Asia who get online via mobile. Mashable reached out to PayPal for an explanation; the response it received, in part, alluded to regulatory hurdles in the region.
“We want to make sure we’re creating solutions that are customized for local market needs across the region. [In Singapore] personal payments are currently not available, in accordance with local regulatory requirements,” PayPal told the outlet.
Ng Zhi Ying of Forrester Research Asia-Pacific shared a more complete theory with Mashable, positing that the company has bigger problems than regulatory concerns in Asia, including a consumer landscape that is sharply divided by a significant population in some regions that doesn’t have bank accounts (which are necessary for PayPal’s service), while in others it faces more sophisticated competitors.
In Asian countries like the Philippines and Indonesia, “cash is still king,” Ng remarked, and telcos in the regions have put their efforts toward building extensive workarounds that allow users to withdraw cash from their digital wallet accounts. As a result, she attests that “PayPal will face notable market penetration hurdles if it launches PayPal.me in emerging countries in Asia.”
As for regions like Singapore and Hong Kong, on the other hand, where the digital payments infrastructure is mature, Ng told Mashable that “PayPal.me does not appear to present more benefits to users than what has already been offered by tech titans or banks in the region,” adding that “it will be an uphill task for [the company] to drive consumer adoption.”
Cost is likely another obstacle for PayPal.me in Asia, Mashable attests, pointing out that in the U.S. the service charges users a 4.4 percent fee plus $0.30 per transaction.
“The fee structure is too high for Asia,” Shiv Putcha, associate director with analyst firm IDC Asia-Pacific, told the outlet. “PayPal will need to localize the fee structure to be able to compete effectively in Asia.”
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