PayPal is not coming to Pakistan

Contrary to IT Minister Umar Saif's claims, PayPal and Payoneer are only entering into a partnership to add PayPal as a payment method on Payoneer. 


Contrary to the claims of Pakistan's caretaker IT minister Umar Saif, PayPal will not start operating directly or indirectly in Pakistan. On Friday, the minister said that PayPal will operate in Pakistan indirectly through a partnership with an existing payment service called Payoneer.

 

PayPal is not coming to Pakistan

However, sources have confirmed that the partnership in no way means that PayPal will start operating in Pakistan in any way. According to the details, Payoneer is entering into a partnership with PayPal to allow PayPal as a payment method for Payoneer users.

 

For example, if you are a US-based company that hires freelancers in Pakistan, you can pay freelancers through Payoneer using your debit or credit card. The new partnership allows Payoneer customers to use PayPal to make payments, just like their debit or credit card.

 

Currently, there is a restriction for Pakistani users that they cannot create an account on PayPal from Pakistan. However, they can do so, if they are UK or US citizens,” said a source familiar with the matter.

 

This partnership does not mean that customers in Pakistan will be able to open a PayPal account directly or through Payoneer.

 

The partnership is not exclusive to Pakistan and extends to all geographies where Payoneer operates. According to one of the sources, the minister making the partnership exclusive to Pakistan could prove detrimental to Pakistan's plans to bring PayPal to the country.

 

The issue of bringing PayPal to Pakistan has been at the center of policy discussions of all IT ministers in recent years due to the growing demand from freelancers to bring the service to Pakistan. Pakistan is considered to be the fastest-growing market for freelancers in the world and was recently ranked as the fourth-largest country by the number of freelancers.

 

In September last year, Caretaker Minister Umar Saif had said that his ministry would bring in PayPal and Stripe, another global payment service provider, to Pakistan to meet the demand for a one-way payment service for freelancers. It is active. The minister had then said that the final news in this regard could be expected in the next two months.

 

However, since then there has been no progress in this regard. According to a study published by the Pakistan Institute of Development Economics (PIDE), PayPal's lack of take-up in Pakistan is mainly due to the licensing regime for Electronic Money Institutions (EMIs), money laundering concerns, and restrictions. There are perceived restrictions associated with the Financial Action Task Force (FATF) on Pakistan

 

The study also cites the exchange control regime and data privacy as one of the major obstacles preventing PayPal from operating in Pakistan.

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