PayPal to get stronger Russian stand

3ebdpaypal PayPal to get stronger Russian stand

Russian newspaper Vedomosti quoted a source in the Central Bankof Russia confirming it had received PayPal’s application. To getthe license, the company must pay about 18 million rubles (slightlyunder $600,000), according to Russian law.There was confusion over PayPal’s official status in Russia whena blog post appeared on eBay announcing that the license had beengranted. The post was deleted a few hours later, but was quoted bya few media outlets and circulated among Twitter users.PayPal has denied it received the license: “Registration isstill in process, we will make a separate announcement when it goesthrough,” PayPal’s press service told RIA Novosti.PayPal has been available in Russia two years, giving users accessto most of its services. The company’s Russian clients have beenable to make purchases online as well as transfer money both in andout of the country, but can only send assets to US banks.The Non-Credit Banking Institution license is the last obstaclein PayPal’s quest to become fully operational in Russia. Licensingis a requirement in the National Payments Law passed by the RussianDuma and signed in 2011 by then-President Dmitri Medvedev; alle-commerce organizations operating in Russia are now required tohave the certification.Acquiring the license is just a formal move by PayPal, ViktorDostov  President of the Russian Electronic Money Associationtold RT Business.“Since the national payments systems law came into force, allelectronic money operators in Russia must convert their business toa credit organization, it can be a bank or non-bank creditorganization. So PayPal just took athe necessary step to meet thenew Russian legislation. ”This move, however, can open new horizons both for the companyand for its customers, Mr Dostov believes.“Now they [PayPal] operate in a very well defined legalframework and I believe they will expand their operation to allthose operations that are necessary for consumers, like payments toand from Russia. Probably they will issue credit and debit cardsbranded by PayPal. This will boost their business by itself, plusRussia will be now a less risky domain for PayPal and they willinvest more money in business promotion.”PayPal currently accounts for 6 percent of Russian e-commerce,according to research last year by analytic firm TNS. The currentleaders are Yandex.Money at about 15 percent market share, andWebmoney at 10 percent.Until recently, e-commerce was not widely popular in Russia:Turnover in 2012 hit a record $9 billion, a 72 percent increasefrom the previous year, according to Investcafe analyst EkaterinaKondrashova. Yearly turnover growth is expected to be at least 20percent till 2017.Analysts do not expect PayPal’s move to trigger any drasticchanges in the market. “Yandex.Money and Webmoney will keeptheir position as market leaders, however, PayPal’s step-in with afull list of services will make all participants revise theiroffers to make them more attractive, thus it will be a positivechange,” Kondrashova told RT.Market leader Yandex declined to comment, saying speculationabout PayPal’s expansion into Russia has been ongoing andinconclusive.

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PayPal to get stronger Russian stand

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