Pakistan Welcomes PayPal (Partially): US Giant Partners with Local Provider
Pakistan’s freelancers are disappointed after learning that PayPal will not offer its services directly in the country. Instead, the company will partner with a local third-party payment processor, Payoneer or some other FinTech company already operating in Pakistan.
The news comes after years of government efforts to bring PayPal to Pakistan. However, the company has cited concerns about money laundering and financial terrorism, as well as the country’s regulatory framework, as barriers to entry.
Pakistan has a large and growing freelance market, with more than 150,000 freelancers in the country. The sector is worth an estimated $2 billion annually.
Digital Rights Foundation Pakistan Executive Director Nighat Dad said that PayPal’s decision to offer services through a third party is a positive step, but it is not the ideal solution.
“Pakistan needs to have sustainable policies in place to attract international companies,” she said. “Until the concerns of foreign companies are addressed, they will either not come to Pakistan or will offer their services with conditions.”
Dad said that Pakistan needs to address gaps in its regulatory framework for international financial institutions and IT businesses. She also called for the government to implement a data protection regime to address the concerns of international companies.
IT expert Masood Raza said that security concerns are a major obstacle to PayPal’s entry into Pakistan. He said that the company is concerned about money laundering and the country’s status on the Financial Action Task Force’s (FATF) grey list.
“The government needs to sign a direct agreement with PayPal in which the company is assured that we will screen users to ensure that they are not involved in any illegal activity,” he said.
It is unclear when PayPal’s partnership with a third party will begin. The company has said that it will provide more details in the coming weeks.
Pakistan’s freelancers are disappointed after learning that PayPal will not offer its services directly in the country. Instead, the company will partner with a local third-party payment processor, Payoneer or some other FinTech company already operating in Pakistan. The news comes after years of government efforts to bring PayPal to…