Why the Global Payment Giant PayPal Not Providing Services to Pakistan?

News Desk3 months ago
Why the Global Payment Giant PayPal Not Providing Services to Pakistan?

In the ever-evolving landscape of global online payments, the absence of PayPal in Pakistan has raised eyebrows and sparked numerous debates. Despite the country’s thriving freelancer community and the growing demand for secure online transactions, PayPal has remained elusive.

Let’s delve into the reasons behind PayPal’s reluctance, the importance of its presence, alternative solutions, and the hurdles Pakistan faces in the realm of international digital transactions.

The PayPal Conundrum

Reasons for Refusal

While PayPal cites a lack of adequate business opportunities as the primary reason for its reluctance, several underlying factors have contributed to the impasse. The company’s assertion that Pakistan is not included in its three-year roadmap due to insufficient business prospects has been met with skepticism.

Grey-Listing Concerns

Initially it was the point that some industry experts argue that PayPal’s hesitancy stems from Pakistan’s grey-listing by the Financial Action Task Force (FATF), a Paris-based terror financing watchdog. The FATF has given Pakistan until February 2020 to implement an action plan to get off its grey list. Failure to do so could lead to further downgrading to the blacklist, posing severe consequences for the country’s financial and banking system.

Right in the next review the Financial Action Task Force has determined that Pakistan has fulfilled all significant, technical, and procedural criteria outlined in both the 2018 and 2021 Action Plans.

Consequently, Pakistan has been removed from the roster of jurisdictions subjected to heightened monitoring, effective immediately. This resolution was reached during the FATF Plenary meeting convened in Paris, France, spanning from October 20 to October 21, 2022.

Also Read: Is PayPal Coming to Pakistan? What Will be the Payment Process?

Previous Government Initiatives

Despite efforts from previous governments to bring PayPal to Pakistan, including a delegation from the Ministry of Information Technology traveling to the US for negotiations, the digital payment giant remains elusive.

The Importance of PayPal

Global Presence

PayPal’s significance in the global online payment industry cannot be overstated. With operations in 202 markets and over 286 million active accounts, it plays a pivotal role in facilitating seamless transactions, allowing customers to send, receive, and hold money in multiple currencies.

Pakistan’s Growing Digital Economy

As Pakistan anticipates the expansion of its electronic payments, estimated to represent a potential market of $36 billion by 2025, the absence of PayPal becomes a critical factor in harnessing the full potential of the digital economy.

The significance of PayPal in Pakistan extends beyond the convenience of online transactions. With the global online payment industry projected to reach $500 billion by 2020, Pakistan eyes a potential market of $36 billion by 2025. Facilitating over 650,000 freelancers and 7,000 registered small and medium enterprises (SMEs), PayPal’s entry could catalyze the shift from a cash-based economy to an electronic payment system.

Alternatives and Potential Solutions

Existing Alternatives

While the absence of PayPal has created a void, several alternative payment gateways have gained prominence in Pakistan’s digital landscape. These include:

  1. Payoneer: Serving as a robust substitute for PayPal, Payoneer has established itself as a freelancer’s digital passport, catering to independent contractors with partnerships with major corporations.
  2. 2Checkout: Globally renowned, 2Checkout offers a secure payment method linked to VISA, MasterCard, and American Express, effectively serving the Pakistani market.
  3. Easy Pay and SadaPay: Tailored for the Pakistani e-commerce market, these regional payment gateways provide local buyers and merchants with convenient and secure payment solutions.

Regulatory Hurdles

The hurdles preventing PayPal’s entry into Pakistan range from stringent regulatory restrictions to concerns about money laundering, fraud, and capital flight. The lack of specific cybercrime-related laws and robust profit incentives further complicate the scenario.

Leave a Reply

Your email address will not be published.