Daily Times

The past few days have brought glad tidings to Pakistan, particularly to its youth. The country has now been added to the sellers’ list of the world’s greatest e-commerce platform: Amazon. Very good news for Pakistan’s budding e-commerce sector. Now, Pakistani traders can export their products all over the world through Amazon.

However promising the prospects maybe, this branching out into Pakistan is of little avail since the most trusted and secure method of online payment, PayPal, does not work here. PayPal is a financial technology company that allows its users to easily exchange money online. The company is fully functional in more than 190 countries with over 361 million active users worldwide. As Amazon comes home, the freelancer community in Pakistan is demanding the establishment of PayPal’s extension here.

It is quite strange that the luxury of PayPal is being enjoyed by those in countries far underdeveloped than Pakistan is, but not us.

In 2019, a Payoneer index reported that Pakistan had the fourth-largest freelancer community in the world. Next year, the same fintech company reported that Pakistan was the world’s eighth fastest-growing freelancing economy. Currently, there are around one million freelancers in Pakistan but sadly, they have no reliable payment options.

Both size of the freelancer community and the freelancing economy has remarkably grown due to various factors, the most prime of which is the unemployment caused by the coronavirus pandemic. After losing jobs, many turned to online earning. The number of freelancers could grow even further once an operator like PayPal entered the marketplace.

The unavailability of PayPal is hitherto the biggest plight of the Pakistani freelancer community. Almost all online job platforms offer this online payment system. Some only accept PayPal

The unavailability of PayPal is hitherto the biggest plight of the Pakistani freelancer community. Almost all online job platforms offer this online payment system. Some only accept PayPal. Thus, its unavailability is bound to lower the spirits of many talented and hungry-for-opportunity purveyors of online services in Pakistan.

Other alternatives to PayPal include Payoneer, Wise and UnionPay. However, the ease of user interface, timeliness and compatibility offered by PayPal makes it stand out among other competitors. Most prospective clients refuse to work with Pakistani sellers because they only trust PayPal for online transactions. This nullifies the proposition of a “domestic alternative.”

The available payment systems sometimes charge as high as 30 per cent of the transaction amount as their fee. PayPal, on the other hand, charges as low as 2.9% of the amount per transaction (plus 30 cents per transaction); favouring the seller who can get the most in exchange for his services or products.

While there are several unethical–some may say, illegal–means to access PayPal from Pakistan, users have to go to great lengths to open a PayPal account. Usually, Pakistanis do this using the help of their acquaintances living abroad. But even then, in a majority of cases, the account is suspended once the area of access is easily traced by the fintech giant. As a result, the payment for completed work stays stuck in the account.

Pakistan has millions of dollars belonging to its freelancers stuck in PayPal accounts. Due to its unavailability, these payments by international clients cannot be availed. The unemployment bulge in the two years has only added to that forbidden fortune.

Thus, now is the crucial time for PayPal to start operations in Pakistan. The COVID-19 pandemic has rendered approximately 20.6 million Pakistanis jobless; many of whom have now turned to online platforms to earn their bread. Companies like DigiSkills, Extreme Commerce as well as the federal government’s e-Rozgar initiative, are determined to equip our youth with skills that sell online. Since many have no other option but to try making it in the online world, Paypal is bound to become an extremely important platform in the future.

Availing the services of PayPal will eliminate the third-party commission fee as the company sends payments directly to one’s bank account for a nominal fee. Its landing in the domestic market would, definitely, attract foreign currency inside Pakistan, thereby, increasing its foreign reserves.

The company itself has a lot to gain by extending its services here. Currently, there are over 3.3 million registered small and medium-sized enterprises (SMEs) working in Pakistan, far greater than Bangladesh, where PayPal has been rendering its services since 2017.

While, Pakistan made its first such request even earlier (in 2015), following up four years later, no follow-up steps have been taken by the authorities in this regard. Why, one may wonder? In 2019, the Ministry of IT had stated that PayPal declined its request due to its internal issues. Apparently, it did not have these “internal working” issues while opening doors in some 200 countries. So much so that it is even working in almost all other FATF grey-listed countries.

If PayPal is so committed to preventing money laundering, why has it given access to countries accused of either terror financing or money laundering? Since no official statement has been given by PayPal, the onus remains on the Pakistani administration.

According to Extreme Commerce’s Founder, Sunny Ali, the government of Pakistan is still unable to fulfil the demands of PayPal regarding the banking system. The banking system of Pakistan does not support overdraft, a key requirement of the PayPal mechanism. Some relevant laws regarding cybercrime are also missing from our legislature. Thus, the writing on the wall is clear: the decades-long conundrum of wretched governance never ceases to haunt Pakistan.

To bring PayPal to Pakistan, some serious work is needed to take place of the ongoing rabble-rousing. The State Bank of Pakistan (SBP) should reduce its licensing fee for PayPal from $2 million. Acquiring a license is yet another hurdle for foreign fintech service providers in entering Pakistan’s market. Getting licensed by SBP is a fairly cumbersome process. Therefore, foreign companies should be provided with incentives including investment-friendly policies to work in Pakistan. Similarly, reforms in cybercrime laws are necessary to assure foreign investors.

If the government keeps neglecting the need for digitisation, potential companies would start investing abroad. This would primarily benefit the foreign countries as the money destined to benefit the local economy would leave for their shores.

The unavailability of companies like PayPal, Google Pay and Apple Pay makes Pakistan an alien in the international digital market. Pakistan cannot be recognised as a reliable entity in the international market unless it is financially compatible with the rest of the world. Now that Amazon is here, the addition of PayPal can open all other platforms that Pakistani service provider long for. Unless the concerned departments show some serious commitment, we cannot hope to see a Pakistani chapter of PayPal anytime soon.

The writer is an engineer and a scholar of history and politics. He can be reached at naumanahmadbhatti@gmail.com