Funds to go toward expansion
PayPal (PYPL) recently joined other investors in injecting $125 million into Indian-based POS (point-of-sale) terminal provider Pine Labs, TechCrunch reported. Like PayPal rival Square (SQ), Pine Labs also makes POS devices that enable traders to accept card-based payments. In addition to selling POS terminals and processing payments for merchants, Pine Labs also offers mobile wallet services and advances loans to customers.
Pine Labs’ notable merchant clients include McDonald’s (MCD), Samsung (SSNLF), Sony (SNE), and Nike (NKE). The company intends to use its newly raised capital to expand into new geographies and launch new products and services.
PayPal looking for a break in the store payment market
Last month, PayPal acquired European-based POS terminal provider iZettle for $2.2 billion, its largest acquisition in history. Its acquisition of iZettle and its investment in Pine Labs are seen as strategic moves aimed at boosting its in-store presence.
India’s digital payment market is booming
PayPal launched domestic operations in India last year, so it could be looking to partner with established domestic players such as Pine Labs to accelerate its expansion in India’s burgeoning payments market. The government’s withdrawal of certain bank notes and the deepening penetration of smartphones and the Internet are driving the uptake of digital financial services in India, particularly as consumers shift to shopping online. This development also explains why Alibaba (BABA) backs several startups in India’s e-commerce and financial technology sectors.
PayPal exited the first quarter with 237 million customers globally.