Why Paypal is not Launching its Services in Pakistan Here know the Reasons

We are living in a world where everything is available almost on the finer tips. The world is moving towards digitalization and Technology makes things easy for people. The availability of smartphones, laptops, and other Electronics gadgets brings a lot of change to mankind’s life. Business community adopting digital financial transactions and moving toward cashless behaviors. People preferred to use Bank cards instead of Cash. It is safe and less risky.

Pakistan is still lower in ratios to adopting the E-Banking and Digital Financial Solutions. According to the survey, only 21.3 percent of the population is using Banking Services. Out of this low rate, only 14 percent are using digital payments and E-Banking. It shows the low priority given to the digital payment ecosystem either due to the traditional banking mindset such as the use of paper for checks and money orders or due to other structural problems.

Using Technology, people started freelancing and start earning online globally. Pakistan’s young generation which is not getting many employment opportunities moved towards the freelancing and with the span of time Pakistan has been ranked as the fourth fastest-growing freelance market with a 47 percent revenue growth in freelance (Payoneer, 2019) and is outperforming regional countries like India and Bangladesh, and Russia.

When you are dealing the Customers globally, the main issue is how to receive your money, paid against your services provided to the customer. The most reliable and trustworthy platform which is using by freelancers in the World is Paypal.

PayPal is an American company and is internationally the largest third-party services provider of monetary transactions with high-tech accounts security and a top-notch financial management system that operates in about 200 markets and has 277 million registered accounts. It also allows its customers to send, receive, and hold funds in 25 currencies.

Paypal services are available in underdeveloped countries like Kenya, Nigeria, Somalia, Comoros, Chad, Burundi, and Angola, but still, the Pakistani community is not within reach of Paypal in the Country. recently Pakistan Government delegation met with Paypal Management to invite them to start the Paypal Services in Pakistan, But Paypal Management refused to start its operation in Pakistan. Here are some core reasons that are the main cause that Paypal is not launching its services in Pakistan.

FATF Grey List

The international payments gateways like Paypal, Google Pay, and Stripe have zero tolerance for money laundering. Unfortunately, it is highly prevalent in Pakistan still due to various loopholes. Pakistan is still on the Grey list of Financial Action Task Force ( FATF) bodies. This is the main reason Paypal has hesitation to start is services in Pakistan.

Credit Card Usage in Pakistan

The second reason perhaps for Credit Cards, credit cards have been the driver of the digital payment ecosystem and PayPal looks into Point of Sale (POS) and credit cards penetration, which is not healthy in Pakistan.

Huge Amount of License Fee to start Services in Pakistan

The third reason for not launching the Paypal service is that Paypal management is not willing to pay a huge amount of license fee. To start Services in Pakistan around $2 million is the license fee which is a massive amount for companies like PayPal that earns two to three percent per transaction, according to the State Bank of Pakistan (SBP).

Restrictions Regarding Holding an amount in Paypal Account

The fourth reason is that soon after PayPal presented its administrations in India and Bangladesh, it confronted severe limitations in regards to the holding of any sum in a PayPal account because of the State’s Bank’s guidelines. This dread drove PayPal and comparative organizations to wonder whether or not to come to South Asia and particularly Pakistan.

So still Pakistan freelancing community has to wait for an unknown time when Paypal Services will be started, Pakistan freelancers have to use alternate options.

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