Islamabad, Feb 19: Pakistan is once again engaging in discussions to bring PayPal into its market, with the Ministry of Information Technology and Telecommunication (MoIT&T) leading the negotiations. Finance Minister Senator Muhammad Aurangzeb confirmed this in a written response to the National Assembly, stating that the State Bank of Pakistan (SBP) has expressed its willingness to facilitate PayPal’s entry, provided it aligns with regulatory requirements.
Current Status of PayPal in Pakistan
- No legal restrictions: The Finance Minister clarified that there are no legal barriers preventing PayPal or other international payment gateways from operating in Pakistan, as long as they comply with the Electronic Money Institution (EMI) and Foreign Exchange regulations.
- Existing alternatives: While PayPal is not yet operational, Payoneer and Skrill are already providing services in Pakistan.
- Home remittance services: PayPal PTE, a Singapore-based indirect subsidiary of PayPal Inc., has agreements with four Pakistani banks to facilitate remittances but does not offer full payment gateway services.
Challenges and Previous Efforts
- Business decision: The Minister of State for IT and Telecom acknowledged that PayPal operates based on its business interests and cannot be forced into the Pakistani market.
- Failed past negotiations: In January 2024, former caretaker IT Minister Dr. Umar Saif announced that PayPal would enter Pakistan through a partnership with an international payment gateway, enabling freelancers to receive PayPal payments. However, this deal did not materialize as PayPal declined to establish direct operations or even a third-party arrangement.
Why Pakistan Needs PayPal?
- Growing digital economy: Pakistan has a booming freelance sector, ranking fourth globally in freelancing. PayPal’s absence limits payment options for freelancers who rely on third-party solutions like Payoneer.
- E-commerce expansion: Pakistan’s e-commerce sector is growing, and access to PayPal would enhance cross-border transactions.
- Ease of international transactions: Many businesses and individuals face difficulties in receiving international payments, making PayPal a highly sought-after solution.
While the government continues talks with PayPal, it remains uncertain whether the payment giant will reconsider its stance. For now, freelancers and businesses must rely on alternatives like Payoneer and Skrill.
