PayPal set to grow in wake of eBay split

Mr Rahul Singhal, PayPal's general manager for Singapore and South-east Asia, said he expects the mobile commerce market to expand quickly.
Mr Rahul Singhal, PayPal's general manager for Singapore and South-east Asia, said he expects the mobile commerce market to expand quickly.ST PHOTO: KUA CHEE SIONG

Company poised to diversify and expand its offerings to tap growing e-commerce market

Buyers and sellers using online payment service PayPal did not miss a beat even as the firm cut ties with its mother ship eBay to become an independent listed corporation.

At its Singapore office in Suntec City, employees continue to work and conduct meetings as usual.

Singapore is the company's regional headquarters for South-east Asia and the Asia-Pacific region, which includes China and Japan. It also hosts a regional development centre of about 200 engineers.

On Monday, PayPal started trading on the United States technology-heavy stock exchange Nasdaq as an independent company.

PayPal officially split from its parent - online auction portal eBay - on Friday last week. eBay, which listed on Nasdaq the same day, bought the payment firm in 2002 for US$1.5 billion.

Last year, eBay came under intense pressure from activist investor Carl Icahn, who proposed that eBay be split into two. Mr Icahn believed that PayPal, which has a faster-growing payment business, would create better value than if it was tethered to eBay.

The split was completed last week and frees PayPal to expand its payment capabilities. eBay did not grant an interview, saying that it is in a quiet period following the announcement of its annual results.

Mr Gilles Ubaghs, a senior analyst for financial services technology at research firm Ovum, said PayPal is now bigger than "its core digital wallet service". He added that it will be able to diversify into many areas, including expanding into consumer credit with PayPal Credit, and mobile point of sale with its PayPal Here service.

Founded in 1998, PayPal has also acquired several firms in recent years, such as mobile remittance platform Xoom, which will allow it to expand its capabilities in money transfers for migrant workers.

"The cross-border market has not been tapped very much. It is very hard to do because of anti-money laundering regulations. But if PayPal can crack this, then it's a huge market," Mr Ubaghs told The Straits Times.

Overall, the split will favour PayPal more than eBay, he added, because it has a lot of momentum, with no debt, and a reported war chest of US$5 billion (S$6.8 billion). "So, we can expect to see more acquisitions from PayPal," he said.

PayPal's general manager for Singapore and South-east Asia, Mr Rahul Singhal, said it is the only payment company with both customer and merchant details. "Because of this, we're unique. We can ensure security and quality of service for both parties."

PayPal is popular, said Mr Singhal, because it is easy to use. People just have to click once or twice and they would have paid for an item.

Looking ahead, he said he expects the mobile commerce market to expand quickly. PayPal's own research showed that last year, the domestic e-commerce market stood at US$3 billion.

Mr Singhal said: "Of this, mobile commerce is US$1.2 billion. Recent data also shows that 65 per cent of consumers here bought something on their phones. This is one of the highest rates in the world."

A version of this article appeared in the print edition of The Straits Times on July 23, 2015, with the headline 'PayPal set to grow in wake of eBay split'. Print Edition | Subscribe