Russian officials have granted PayPal permission to fully implement its service starting Sept. 17, according to local business newspaper Vedomosti. PayPal users will be able to add rubles to their accounts and transfer funds between Russian banks.
PayPal previously added rubles to its list of accepted currencies, but regulations in 2011 made all e-commerce organizations operating in Russia to have a non-credit banking institution license from the Central Bank, according to the article. Without the license, PayPal account holders in Russia were prevented from setting up connections between bank accounts.
That did not stop the company, however, from competing in the extremely promising e-commerce segment, which is expected to growth by at least 25 percent in the coming years. According to a TNS Global report, PayPal is fourth in Russia for e-commerce payments behind Yandex Money, Qiwi and WebMoney. The company also hopes that this next step will help it move beyond e-commerce in the near future to also include mobile payment services that are being launched around the world.
The announcement that PayPal will now have its full suite of services in Russia is significant. Users worldwide view it as a trusted brand and the company might win over Russian consumer who are still hesitant about making payments or transfer funds online. The established Russian players, however, will not be pushovers, so PayPal will have to be patient.
For more information about the Russian consumer payment market, see Mercator Advisory Group’s research report, Introduction to the Russian Payment Market, published in April 2013 () Also see Mercator’s recent webinar on the topic, Understanding the Russian Payment Market Webinar.
