Introduction of PayPal
PayPal Holdings, Inc. is an American multinational financial technology company operating an online payments system in most countries that support online money transfers, and serves as an electronic alternative to traditional paper methods such as checks and money orders
PayPal in Pakistan
Because of advancements in information technology and science, fund transfer has also
changed with time. In the previous time, money was transferred through the
banking system, but we are using different methods; the most
effective and standard online payment system is PayPal.
PayPal
is a fund transferring US-based corporation which helps its users to transfer
money up to 200 different countries worldwide. The users can connect their
PayPal account with their credit card, debit card, and bank account. PayPal has
around 300 million users, with a 3.5 percent growth over the last twenty years.
In the online digital currency transferring market, PayPal has a powerful position. PayPal is working in Asian countries like China, India and
Bangladesh.
Services
of PayPal
PayPal
services have three types of regions or countries:
- One who can send and receive money.
- One who can send and receive money with automatic
transfer. - One who can send payments only.
Significance
of PayPal
- PayPal is an
easy and fast money transaction and transferring system - PayPal has a
direct relationship with freelancers to help them expand the business
throughout the globe - It’s a safe
system that provides complete information about your bank account and other
transfer and transaction details - It allows its
customers to use several bank accounts, credit cards, and debit cards - Cost-effective
system - Act as a third
party between the two parties for financial payments - It is a
financial technology company that permits its users to interchange money
easily.
Regulations
Regulations
for Electronic money Institutions (EMI) according to the state bank of
Pakistan, EMI must maintain the startup capital expenditures of PKR 200 million
and maintain minimum ongoing capital all the time. A second important issue is
the payment service provider, EMI. The license has three approval stages, and
EMI must go through these stages.
- Principle
approval - Pilot operation
- Complete
operation
All
responsibilities will be on EMI in case of any illegal money transfer. Because of these strict restrictions in the US, maybe such resistance could not initiate a
business. According to the State Bank of Pakistan opinion, the significant
barriers in the way of PayPal are data privacy and the exchange control regime.
FAQs About PayPal Account
Does PayPal work in Pakistan?
- The important question always arises in every Pakistani’s mind does PayPal work in Pakistan? Unfortunately, PayPal is not working in Pakistan. You can open a PayPal account, but it will be illegal when you create history on PayPal while filling in personal information; you do not find Pakistan in the countries listed. But through some other ways, you can open your account.
Why
is PayPal illegal in Pakistan?
Money
laundering and FATF
Money
laundering is one of the significant issues that do not allow PayPal to enter
Pakistan. Money laundering in Pakistan has been raised within the past few
years. The Financial Action Task Force has put down Pakistan on the grey list
since 2018 because of failing to check money laundering and terror financing. Because of this, EMIs act according to harsh regulations to avoid money laundering activities.
It is the reason for strict restrictions PayPal is unwilling to come. PayPal is
working with other countries despite money laundering risks more than Pakistan.
Money laundering is not a severe issue for PayPal Company. That was the
argument.
Attitude
towards the entry of PayPal in Pakistan, digital currency, and payment is not
supported by the government. For example, a digital currency, Bitcoin, is
banned in Pakistan. PayPal is not coming to Pakistan near future. Pakistan is
lower than regular ATM users, e-wallets, and electronic transfers. In the US,
PayPal works as a digital wallet, and in other different countries operates as
an institution for money transfers.
How
does the freelancer community face hurdles while transaction and transferring
money?
Amazon
has added Pakistan to the seller list, and this will be very important for
budding e-commerce, especially for youth. Now traders can expand their trades
and export their products through amazon worldwide. But PayPal is still not
working in Pakistan, the most secure and trusted online payment method. After
the addition to the amazon seller list, Pakistani freelancers demanded the
formation of a Pakistani extension of PayPal.
According
to the report of the Payoneer index, Pakistan had the 4th most comprehensive
freelancing community in 2019. This same company reported in 2020 that Pakistan
is the 8th fastest growing freelancing economy. Pakistan has around
one million freelancers currently, but they do not have any reliable option for
payment. Coronavirus was the primary factor in growing these numbers due to
unemployment. Approximately 20.6 million people in Pakistan have been left
jobless during this pandemic. Many people, especially youth, move towards an
online working system. If PayPal entered marketplace number of freelancers
could increase further. Therefore, it will become more critical.
The
unavailability of PayPal is a significant difficulty for the freelancer
community in Pakistan. Almost in all online jobs, PayPal is an option, and
there is an only acceptance of a PayPal account. Some have other options like
Payoneer, Union Pay, and Wise. Because of the absence of PayPal, Pakistani
freelancers have to face trouble with the client because most clients refuse to
work without a PayPal account. They trust only PayPal for their online business
for money transferring and transactions. The unavailability of PayPal and Apple
pay makes Pakistani workers unfamiliar throughout the entire world despite the healthy
strength of freelancers in Pakistan.
Why
has PayPal still not come to Pakistan?
Pakistan
made its first request in 2015 to PayPal to contribute its services to our
country. In 2015, another attempt was made in 2019 by the Ministry of IT and
Telecommunication. But the authorities have not taken a follow-up step to bring PayPal to
Pakistan. Regarding the banking system, the Pakistani government could not execute the demands of PayPal. For PayPal in Pakistan,
the state bank of Pakistan should play its role in the license fee for PayPal,
which is $2 million, because license is also a significant problem for
Pakistani sellers.
Why does Pakistan need PayPal?
Pakistanis are not short of talent, especially in freelancing. You will be amazed to hear that Pakistan is ranked 4th in the list of countries offering top quality freelance services, and this is some achievement. Pakistani freelancers are generating millions of dollars every year, and they need a reliable and easy to use the platform to get their payments, and what is a better option than PayPal?
Apart from freelancers, there is another field that has shown a high potential of earning “hefty bucks,” and that is e-commerce. We all know that the world is shifting towards digital businesses, and this is becoming a need for time. Pakistan has so much to offer to the world, and e-commerce is undoubtedly the best platform. Companies, sole proprietors, solopreneurs, and other businesses can sell their products or services to their foreign clients through e-commerce. But, they need a reliable channel like PayPal.
Final Words About PayPal Account 2022