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Insight: Why PayPal Refused To Operate In Pakistan?

PayPal refused to come to Pakistan

The news about the PayPal’s refusal to come to Pakistan spread like a wildfire. Rather we rant on the news, let’s take a closer look and start addressing the reasons as to why the global online payment platform refused to operate in Pakistan?

Despite being the 4th largest freelancing community in the world, Pakistan is not on PayPal’s radar. The company has its assigned ways of evaluating markets and Pakistan is subjected to the same evaluation. After the business case is developed by the company, Pakistan doesn’t seem fit to their specificities.

PayPal isn’t coming to Pakistan because of its “internal issues”, announced Information Technology Secretary Maroof Afzal during a Senate Standing Committee on IT briefing on Thursday, May 16th 2019.  

The Power of Narrative Building

Here we must understand that PayPal’s internal issues are very much linked with Pakistan’s internal affairs. Pakistan’s IT ministry has been given to a person who’s a doctor by academics. It’s like asking a fish to climb the tree.

Mr Siddiqui is far from the technicalities and in-depth understanding of the country’s digital landscape and once expressed his discomfort in becoming the I.T minister. Imagine the narrative you have thrown out to the World – Information Technology and Digital Financial Landscape are not among Pakistan’s top priority.

Let’s hope if Mr Siddiqui can do Bibbidi-Bobbidi-Boo and revamp the Digital Cinderella in Pakistan…

On the other hand, many ignored the underlying facts and continue to blame PayPal for being biased, however, let me pinch to bring in reality. Pakistan has been the country where the entire election campaign was run and won over money laundering. We had been defaming and ridiculing Pakistan’s ex governments for being Money Launderers. Now how do you expect giants like PayPal to overlook it?

Read full: The Largest Freelance Marketplace – Upwork to Charge Freelancers to Bid on Jobs

The case is not on rest, Pakistan is coming up with hundreds of Money Laundering Cases every day, identifying the massive failure of our banking system. Bitter it is, but true, in Pakistan, power is above institutions and this is why we must not blame business players outside Pakistan.

PayPal is a business and must be taken as a business deal. So like any other business, they looked for facts like the market size in terms of the number of online merchants, internet statistics and the average cost of purchase online.

Due to Pakistan’s internal institutional deficits and lack of transparency, PayPal was unable to gauge AML (Anti Money Laundering), OFAC (Office of Foreign Assets Control) SAR (Suspicious Activity Report). PayPal itself can be penalized by the State Authorities from the country they operate if any of the above goes wrong. The risk involved in comparison to business opportunity is a lot higher for PayPal.

Also, only 17% of Pakistan’s population uses bank accounts. It’s not a very healthy figure to pull in companies for expansion in Pakistan.

Whether PayPal considers to start in Pakistan or is more inclined to improving and expanding its customer base in the existing ones, their concerns for Pakistan are real. Primarily, Dan Schulman and his team are more involved in increasing business for PayPal in the existing markets than to start in any new country, especially when the focused country like Pakistan is stuck in its own financial turmoil.

On the contrary, if above are all the reasons for not operating in Pakistan, why PayPal is operating in Latin America and countries like Rwanda etc. where money laundering is a routine. Nonetheless, whatever the reasons are, Pakistan’s entire digital ecosystem must take its narrative building seriously and look for a collective approach to improve it.

Not just that Pakistan’s digital markets are under-evaluated, it is wrongly portrayed in the rest of the world. According to Monis Rehman, Chairman, CEO & Founder of Naseeb Networks,

“Pakistan is ridiculously misconceived by the portrayal that Fox News presents. When organisations like PayPal look through that, their entire investment looks at stake. That’s how major investments are not coming to Pakistan.

Many a time, it is discussed in conferences, incubators and accelerators that how top investors and companies are unaware of Pakistan’s growing digital landscape. Many have no idea that Pakistan’s total no. of mobile connections as of January 2019 has touched 154.3 million and internet users in Pakistan have reached 44.61 million.

Irrespective of all the progress, the only sufferers are the freelancers of Pakistan who worked hard to pave out their ways in the global market.

Unfortunately, the growing digital economy in Pakistan is not even in the talks of the top tiers of the Silicon Valley. There are gross misconceptions about Pakistan in the outside world that our leadership has to take up as a challenge, constructively design to build the narrative of Pakistan.  

The realities that Pakistan has lived up are not very fertile to attract investors or companies from across the globe. It’s a long way to go but its never too late to start building!

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Madiha Ahmed
Madiha Ahmed
Madiha (Yusuf) Ahmed is an Independent Journalist, ideally reports technology updates, social happenings and covers features. Professionally, she is serving as a Manager Content in a Digital Agency and specialises in Content Curation, Strategy and Marketing.

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