The FINANCIAL — “Cash on delivery which remains relatively high in Georgia is currently the main competitor for PayPal,” Damien Perillat, Director of PayPal in Central and Eastern Europe, told The FINANCIAL in answer to a question related to Google Wallet.
He said that PayPal is to appoint a special person in charge of PayPal business in Georgia, who will then manage their duties via the internet. The launch in Georgia comes as internet and e-commerce are on an upward trend and as Georgians’ appetite for online transactions is growing: in just the first few months of last year, National Bank of Georgia registered a record volume of internet transactions, up 162%.
Global e-commerce business, PayPal, allowing payments and money transfers through the internet, entered the Georgian market last week. Until now Georgia was in the list of the few countries where PayPal does not operate. Despite the fact that the service was available in Azerbaijan and Armenia, the Georgian Ministry of Economy spent two years in negotiations with the California-based company, offering its market to the global e-payments leader.
Perillat said that entrance to the new market requires working closely with the local ecosystem, including regulators and deeply understanding local consumer needs. “This is particularly important in the field of payment services and Georgia is no exception,” he said. He did not however name the reasons behind the extent of the delay with Georgia.
“As is our experience everywhere else in the world, expanding our business in a new market requires a lot of preparation, attention and investment. Especially if you are dealing with people’s money, you’d better do it right the first time,” Perillat told The FINANCIAL.
News about Paypal’s entrance rapidly reached millions in Georgia, so the company cancelled its official Skype media briefing scheduled for this Monday. Georgian banks rapidly responded to the news by announcing their services tailored to PayPal.
“Cash payment at delivery may raise issues of trust between buyers and sellers, and bears a high cost for e-commerce when it comes to cashing in, returns etc. PayPal acts as a trust factor and provides safe and efficient payment, so we believe this will encourage users,” said Perillat.
Georgian consumers will not be able to send money via Paypal at this stage. “This is the first step in our longer-term strategy. We aim to introduce the possibility to receive and withdraw money at a later stage. We are following a step-by-step approach,” said Perillat.
“When it comes to cards and bank support for Georgia it works exactly the same as everywhere else. The sign-up process takes only a couple of minutes. With PayPal, buyers do not need to retype the details of sellers’ accounts, shipping addresses or transactions over and over again – the payment process can be completed in just a few clicks,” he explained.
In Perillat’s words, peer to peer payments are not their main focus at the moment. “Today, where we put our hearts and minds are services that enable Georgian consumers to make transactions with PayPal worldwide.”
PayPal’s total value of transactions in 2012 reached USD 145 billion, up 22 percent year over year. It’s already 40% of eBay Inc’s revenues, and the goal for the Group is to reach USD 300 billion. PayPal’s net Total Payment Volume, the total value of transactions in Q4 2012 was USD 41.5 billion, up 24 percent year over year. PayPal has 123 million active registered accounts and is available in 190 markets. PayPal has been under the ownership of eBay since 2002.
In the fourth quarter of 2012 PayPal’s active account growth accelerated to 15% and ended the year with approximately 123 million registered accounts. So we added nearly 2 million accounts a month in the fourth quarter, representing the company’s fastest active account growth rate in years. We hope that this trend will continue.
Offering direct integration of PayPal payment solutions for local e-commerce websites is the first step in a long-term strategy.
“We aim to introduce the possibility to receive and withdraw money at a later stage,” Perillat said.
PayPal operations in Georgia will be coordinated from the company’s HQ. “We have a dedicated team that will maintain and develop relations with your market, consumers and entrepreneurs. The internet is in our DNA and as such a company we don’t necessarily need to open a local office to offer services or cooperate on a local level,” Perillat told The FINANCIAL.
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