One of the most talked-about topics in Ukrainian media this week was the speech of the First Deputy Minister of Economic Development and Trade, Maxim Nefyodov. He said that “PayPal doesn’t want to work in Ukraine.” Those whom many would call skeptics, but who are realists in fact, fully agree with this conclusion. However, there are many who are convinced the only obstacle to the full-fledged work of PayPal in our country is the legal «walls”. I would like to make an alternative opinion regarding the discussion that took place this week and ask a completely logical question — do you really need PayPal when Xoom and competitors are actively working in Ukraine?
What is the status of “non-priority region”? Such a concept is characteristic in business strategy of all international companies. They build long-term development plans and invest resources primarily in those areas that they consider the most profitable. Analysts evaluate risks, study the market for each promising region — most often involving international analytical services with offices in countries whose markets they’re planning to research. If they don’t see the prospects, then these data are fully objective — for this particular company in the particular period of time. In the foreseeable future, this may change, especially because the active actions of the National Bank of Ukraine in developing the new Ukrainian financial market.
In other words, there’s 2018, the number of bank cards in Ukraine is bla-bla, the average income of bla-bla-bla, the main banks of the country have bla-bla hundred thousand plastic emitted etc. PayPal analysts took this information from hired analysts, compared it with the cost of entering a new country, remembered they tried to do something like a few years ago … and switched to another country, where everything is a little bit easier. If in 2020 such measurement of effectiveness seems acceptable to them, the headlines of all media won’t allow to lie about a long-awaited event. Or will there be no “breaks the internet”?
Don’t get me wrong, the PayPal release in Ukraine will be an event, and it will be a discussed event. But the pace of money transfer development and related services is such that in a couple of years PayPal will not be so relevant for us. We’ll overgrow it.
Google Pay went to Ukraine, and then Apple Pay did the same in the shortest time possible. And they were satisfied, because the number of tokenized transactions many times exceeded the expectations of the company from Cupertino. This was said a week ago during Mastercard Day. By the way, Masterpass is developing, becoming on the same level with the wallets I mentioned. They started working here because they saw prospects. For them, Ukraine was a terra incognita, but the risks were worth it — in a few years, Kyiv became an advanced cashless metropolis, surprising for its infrastructure even Eurozone residents.
In addition, PayPal is not a unique payment system. Despite the leader status, the company has a number of competitors who are already working in Ukraine and they’re increasing their presence here.
For example, Payoneer is successfully working with us — the second most important payment system after PayPal, long known to everyone who was looking for a convenient alternative for business or freelancing. Also, Skrill works with one of the largest Ukrainian banks. And one look at the constantly growing turnover of international money transfers to Ukraine is enough to understand, how important it’s to provide a high-quality service for this industry. And if PayPal does not develop the market of international money transfers, competitors will do it. Answering the question in the title — yes, we we’ll need it, but only as an additional tool, and not as a driver of innovations.