PayPal is empowering thousands of Filipino freelancers and entrepreneurs to tap the global market, according to a regional executive of the global financial services company.
“PayPal is a platform that enables commerce for both consumers and buyers globally. PayPal essentially helps both consumers and businesses connect to each other. We also enable trust and confidence for people to buy and sell goods and services around the world,” says Nagesh Devata, director and general manager for Southeast Asia’s cross border markets at PayPal.
PayPal enables cross-border payments in a very secure method, he says. It was the main payments provider of eBay for many years until the two publicly listed companies split into separate entities in 2015.
“Over the last four years following the separation from eBay, PayPal has had a tremendous growth as a standalone business and independent financial services company,” Devata says in an interview at Fairmont Hotel in Makati City.
Since PayPal was established in San Jose, California in 1998, the company has recorded 1.7 billion transactions such as money transfers and online payments. The Asia-Pacific region, including the Philippines, is now one of its growth areas, says Devata, a Canadian citizen.
“What we are seeing is additional growth in Asia-Pacific. We are seeing growth across the region in terms of new markets in Southeast Asia, India, China, Japan and Australia. We are seeing growth across all these markets,” he says.
295 million customers
“We have roughly 295 million customers on our platform today,” says Devata. PayPal, which employed 21,800 individuals across different countries in 2018, has more than 40 global partners such as Facebook, Alibaba, Google, Microsoft, Visa and Mastercard. Since launching its first mobile product in 2006, the company has seen $227 billion in total mobile payment volumes as of 2018.
It is particularly active in the Philippines which is known for its vibrant gig economy, with an estimated 1.5 million freelancers. Devata says the large population of Filipino migrants also makes the Philippines an attractive market, with PayPal tapping local partners such as Philippine Airlines and Cebu Pacific for airline ticketing payments.
“PayPal addresses the needs of both consumers and businesses and help them to do commerce and provide that trust. We are seeing more businesses use PayPal across Southeast Asia and the Asia-Pacific region,” he says.
Devata says the initial growth in the Philippines came from the expanding freelance and SME communities. “Freelancers have been a very strong area of focus for us. Over the last several years, we have been working with the freelance community in terms of connecting to platforms in the region or the US. We are giving them a way to connect to businesses around the world,” he says.
He says more merchants in the country are now also using PayPal. “You have large merchants that are using PayPal like Philippine Airlines and Cebu Pacific. Part of the reason why they see such value in PayPal is their ability to connect to international consumers and new markets as they expand their businesses,” he says.
Another segment, he says, includes overseas Filipinos who want to buy products and services back in the Philippines. “Whether they want to purchase airline tickets, or they do bills payment on behalf of their family, we work with a number of businesses here in the Philippines. We make it easy for them to pay for a bill, buy an airline ticket, pay for someone’s school or any service that relates to cross-border. We are well positioned to help them facilitate and make it easy to buy,” he says.
Devata says beyond the aspect of buying goods and services, PayPal provides seamless, secure and great checkout experience and allows users to conduct business in different currencies around the world.
“Most importantly, we provide the ability to start a business very quickly and ultimately get access to a global market. This is what makes PayPal unique and this is what has given its longevity over the years as it continues to expand to more markets,” he says.
“At the end of the day, if you think about what PayPal is, it is fundamentally a risk management company. We are able to manage risks because we are playing at two sides. We play with merchants, and we work with the consumers on both sides. As they are making those transactions, we can monitor all the different variables that go into that engagement. We monitor those transactions through human engagement, data analytics, machine learning, and all that go in there. There is a huge number of other variables that we are constantly tracking to make sure that you as a consumer, when buying something, feel secure,” he says.
“We are effectively a two-sided network that is able to manage risks on both sides. That is one of the most compelling and real-differentiated advantages for PayPal when doing cross-border commerce,” says Devata.
Devata says even with the rise of blockchain companies that also offer cross-border transactions, PayPal has the advantage of a global network that understands local conditions.
“Blockchain is relevant and it is something that PayPal is tracking and monitoring. We are always looking at what the trends are and what can be the future developments. From PayPal’s perspective, it is something we are aware of. We are actively monitoring it. We are actively tracking it. We are seeing where it may be in the future,” he says.
“Our core infrastructure is API-driven which is scalable and global and has understanding of local market conditions. PayPal understands the needs of both consumers and buyers. A lot of that comes from years of building that up and constantly innovating the platform, the capability, technologies and solutions,” he says.
He says in a way, PayPal is contributing to financial inclusion. “We work with partners that are enabling commerce to make it easy for entrepreneurs to start selling online. We work with partners that can help set up a store front, build a website and enable payments very easily,” he says.
“If I am a small business in the Philippines and I want to sell something that is unique from the Philippines such as clothes or mangoes and I want to connect to consumers globally, that is the real strength of PayPal in building business globally,” he says.
“On the flip side, you have consumers around the world that have PayPal. That becomes the easiest way for consumer to buy something from a Filipino business,” says Devata.
“From the PayPal perspective, it is about supporting the ability of the merchant community to conduct commerce and not limiting themselves to just a defined set. It is about empowering existing and future entrepreneurs and exporters to grow their business and help them find new customers around the world,” he says.
Devata is optimistic about the opportunities in the Philippines which he describes as a market that will “see businesses and entrepreneurs move towards export-oriented growth”.
“It will drive more financial independence for entrepreneurs and businesses. It will help them bridge the gap and be able to move very quickly in their digital journey. This is a market that is extremely oriented toward social media. Social commerce will play out in this market and enable people to conduct commerce and be able to buy and sell through a platform like that. It is a potential that the Philippines will embrace in the future,” he says.