SAN FRANCISCO | PayPal is making moves. The online payment processing service has been eyeing Russia for years and finally regulators have given PayPal the green light. The licensing provision gives PayPal the right to operate as a non-credit banking institution in Russia, furthering eBay and PayPal’s move to the fast-growing market. In a blog post, eBay said it is “happy to open up yet another domestic market, making it easier for all of our customers to buy and sell across borders.”
The acquisition makes nobody happier than eBay. Since setting up shop in Russia in 2010, the online marketplace has looked long and hard for an e-commerce partner, much like the one it shares in China with Xiu.com, and PayPal fits perfectly. It was reported in October 2012, the number of Russian customers shopping on eBay had increased 82 percent that year, making Russia and China the top priorities for eBay as it looks to expand its international presence.
In a recent interview, Steve Milton, director of global communications for eBay International said, “Russia is a fast-growing e-commerce market, and we are actively exploring ways to make it easier for Russian buyers to purchase on eBay and to open the market up for international sellers to sell to Russian customers.”
He goes on to say that eBay accounts for just 3 percent to 4 percent of e-commerce activity, yet remains the leader in a highly fragmented marketplace. ”Why we are investing so rapidly in Russia and China, is a lot of eBay future growth … is going to come from markets like Russia and China,” Milton said.
The biggest drawback of Russia’s e-commerce industry is their own postal service. The unstable and flakey postal service in Russia has caused State authorities to consider a $21 billion plan that would overhaul Russian Post and partially privatize the service.
Although Milton stated Russia will remain an import-only operation, he did go on to hint that new developments in Russia could be coming soon and “stay tuned” for future announcements.