PayPal a game changer for online business in Pakistan

To attract online payment platform, govt will have to check money laundering

Imran Batada July 15, 2019

KARACHI: This year we all have heard a company’s name multiple times. This name is PayPal.

The reason for this company being in the news limelight was its denial to initiate its services in Pakistan. The government of Pakistan has tried its level best to convince the US-based company to start its operations in the country but to no avail.

Imagine the impact and scope of this company, which can refuse to get into the market as prospective as Pakistan’s, which accounts for one of the fastest growing populations across the globe. Pakistan houses around 200,000 freelancers and over 7,000 registered small and medium enterprises (SMEs), which can utilise the services of PayPal.

With the advent of ICT, the freelancing industry of Pakistan has been flourishing by leaps and bounds. This is evident from the report of the Global Freelancing Industry where Pakistan acquired fourth position. This clearly shows the strength of freelancing industry in the country. 3G and 4G services have had a great impact on business activities in Pakistan.

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With the increasingly developed telecom industry and ICT trends, more and more people have tried their lucks working for foreign clients. Different freelancing platforms such as Fiverr, Upwork, Freelancer, Guru and People Per Hour have proved to be quite instrumental for Pakistani freelancers.

However, one challenge that this growing freelancing community has been facing is the absence of a secure online payment transaction firm.

As far as making secure transactions across the border is concerned, the first name that comes to mind is PayPal. Through PayPal one can pay, send and accept payments from anywhere in the world. All what has to be done is to register credit card or debit card with your PayPal account.

Almost all the sites which ask for money have PayPal option, which can be selected to avail offered services of the website. One can also shop with millions of online stores and merchants and sellers across the world using PayPal.

PayPal has been offering services to Africa. Even under-developed countries such as Nigeria, Kenya and Somalia have been availing PayPal services. PayPal also operates in countries like Angola, Burundi, Chad and Comoros despite them being the least developed countries of the world.

As per the United Nations, these are the countries which exhibit the lowest indicators of socio-economic development, with the lowest Human Development Index ratings. However, it boggles one’s mind when these countries belonging to the under-developed world can convince PayPal but Pakistan can’t.


There are several reasons because of which PayPal is truly the most preferred online method of payment. Using PayPal, transactions can be carried out in minimum time period. PayPal has also set the transaction charges quite low. Mere 30 cents per transaction plus 3% of the total amount of the transaction is charged.

Security of payment is another major benefit of using PayPal. Both the buyers and sellers are guaranteed by PayPal to get what they have asked. The accounts of PayPal users are also fully secured.

Pakistani freelancing community and e-commerce players realise all these benefits of using PayPal, this is why they have been repeatedly putting pressure on the government to bring PayPal to the country. Former finance minister Asad Umar had also shown commitment to facilitating PayPal’s arrival. However, the US company informed Pakistan that it would not come to the country.

Information technology secretary put forth that the reason PayPal declined to operate in Pakistan was the nature of its internal working, which makes it unprepared to introduce services in Pakistan.

Experts also say that POS and credit card penetration is not healthy in Pakistan. This also can be the reason for PayPal’s refusal.

Money laundering is another reason which makes it difficult for PayPal to provide its services to Pakistan. PayPal has zero-tolerance towards money laundering, which exists in Pakistan in exponential amount.

Policy steps

The government has to make a robust policy to curtail the menace of money laundering. The culture of freelancing should be promoted and freelancers across the country should be facilitated as much as possible.

The Ministry of IT will have to play quite a proactive role in this regard. A task force should be formed, which on the one hand should portray the positive picture of growth and scope of freelancing in Pakistan and on the other hand should convince PayPal that its insecurities, especially those related to money laundering, have been eliminated to a substantial extent.

The government will also have to play a proactive role in curtailing the growing incidences of cybercrimes. The Federal Investigation Agency (FIA), in this instance, can play a pivotal role.\

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The State Bank of Pakistan can also play a significant role in convincing PayPal. However, it should always be kept in mind that mere table conversations cannot convince global corporate giants like PayPal.

Absence of PayPal services results in losing tens of millions of dollars of foreign exchange. The Pakistan Tehreek-e-Insaf (PTI) government has recently taken steps to curb the menace of money laundering.

Furthermore, special emphasis has been given by the government, especially the FBR chairman, on the documentation of economy and bringing maximum number of people into the tax net.

These steps are commendable and will definitely prove instrumental in bringing PayPal to Pakistan. However, continuous efforts in the same direction need to be made by the government for convincing PayPal to come to Pakistan.

The writer is Director ICT & Founding Director of Centre for Information and Communication Technology at IBA

Published in The Express Tribune, July 15th, 2019.

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sabah noor | 3 years ago | Reply appreciative writing style
Sophie | 3 years ago | Reply Pal Pal doesn't want to be associated with money laundering - and we have yet to remove the taint of being on the gray list of FAFT. We need to clean up our act b4 we can attract Pay Pal.
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