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PayPal in Pakistan

PayPal in Pakistan

For the past 11 years I have been writing religiously every January an Open Letter to the President of PayPal, arguing a case for them to come to Pakistan. Also, see an update to this letter as to why they are not coming to Pakistan. For 10 years, I did not hear back from PayPal. Not once. No matter how ingenious the approach, I never got so much as a peep out of them. All that changed in 2013. For the first time ever, I did get a reply back from PayPal via unofficial channels. Before I delve into the content of the communication with them, let me say, there will be no more letters from my end now to PayPal. There is only so much one can do and invest time in. I think I have done enough from my end. For reasons that are personal, I shall not be pursing this cause any further. The baton and cause now needs to be passed on to others. Continue reading

Update: Why PayPal does not offer its services in Pakistan?

PayPal in Pakistan

 

I have decided to update the answer I had written below. A lot of people have asked me why PayPal isn’t operating in Pakistan especially after I wrote an Open Letter to David Marcus (President of PayPal), See: Open Letter to David Marcus, President of Paypal by Faisal Khan on Posts Continue reading

An Open Letter to David Marcus, President @ PayPal.

Open Letter to David Marcus, President of PayPal

January 16th 2013.

David A. Marcus
President
PayPal
2211 North First Street
San Jose,
California 95131

Subject: PayPal for Pakistan

Dear Mr Marcus:

For a little over 10 years now, I have been writing to the President/CEO of PayPal every January asking Why isn’t PayPal available in Pakistan? For 11 years straight, I have never received an official reply. Not once. Continue reading

WordPress Payments

One of the most recognized platforms in the world for blogging is WordPress, however, if you were to opt for an upgrade (as I tried), from Pakistan, it is not possible.

While trying to pay for the upgrade, I received an error message that said: This transaction cannot be processed. Please use a valid country on the billing address.

Since WordPress uses PayPal for its payment processing, unfortunately, Pakistan is not on the list of countries support by PayPal for payment processing. There are quite a few countries that are blocked because of this reason.

Here is a forum update that I found on the above mentioned subject.

 

Why doesn’t PayPal offer its services in Pakistan?

The questions that everyone wants an answer to. I have been writing to PayPal for 10+ years to solicit a reply from them – as to why they are not here in Pakistan (you can read that correspondence onwww.faisalkhan.com)

PayPal operates in various countries but a few countries like Pakistan, Bangladesh, (amongst the larger ones) are missing. When countries like Somalia, Yemen and Rwanda are included in the list of countries where PayPal is available, one begins to wonder why Pakistan is not included.

It is not primarily about market size, I am sure Pakistan’s market size is a whole lot larger than many countries (combined) where PayPayl currently operates in.

The issue is country risk. <- I cannot sum it more accurately.

A financial institution like Paypal does risk assessment in their own way to assess which country it should and should not do business with. PK, whilst a large market size (compared to say Sri Lanka or Yemen or Rwanda) still poses a high-risk due to the factors like:

  • KYC (Know Your Customer)
  • AML (Anti-Money Laundering)
  • OFAC (Office of Foreign Assets Control)
  • SAR (Suspicious Activity Report)
  • Beneficiary Information

The above (IMHO) are the major issues that PayPal faces, not being able to accurately gauge the above, is a risk that PayPal does not want to take.

They, PayPal can be penalized by the financial regulator in the country they operate FROM (not To), and the risk of account freezing, etc. All these factors they have to weigh against how much money they can earn (and they have a pretty good estimator for this). The risk vs the income – makes them conclude that PK is a risk country as far as business is concerned.

In addition to this, a small group with PayPal is trying to convince their management to look into Pakistan, whilst a large portion of members within the PayPal corporate world are literally biased and oblivious towards Pakistan as well (this is not an empty statement, but the ground reality within PayPal). PayPal itself is not entirely ‘clean or fair’ in its efforts. The ruckus that Pakistan is a money laundering country, etc. fails and pales in comparison to the amount of money laundering done in the US, and Latin America. As with every Pakistan/Indian issue, there are bigoted people within PayPal who are still harboring the animosity towards each other, is also another unsaid reason why Pakistan and Bangladesh have not gotten PayPal.

There is absolutely NO written notification and/or official circular from the US Government or Federal Reserve that ‘prevents’ Pakistan from having PayPal or tells organizations PayPal to discourage the Pakistani market. This myopic stance within PayPal is biased and unfair.

As previously speculated on many forums, it has NOTHING to do with SECP, SBP, FBR, etc. – - – that is not the issue (nor ever was).

A lot many forums and discussion boards have proposed that if PayPal cannot come to Pakistan, we should have our own payment system for the world to accept and adopt.

If you track payment systems, there are currently over 250+ payment system, after discounting the top 10-15 payment system, the rest of them COMBINED together probably do not do more than say #14 or #15 on the list. Having a payment system is one thing, having it adopted and be utilized and accepted by others is another matter entirely — and in some cases the key.

Lets talk about inward micro-payment options (barring PayPal) – you have none. No other micro payment system exists currently other than Paypal (sub $1 payments notwithstanding) that is worth mentioning or worth trading or transacting on. Even if you will make one, do you actually think your buyers in the international arena will adopt it? (I dont think so). Even some famous ones are having issues adopting.

The same can be applied for outward settlement. The fees structure for settling payment outside of Pakistan is quite complex. Daily reporting on transactions, along with the KYC and AML needs to be reported to the PRI division of SBP.

Without having any a priori information on the subject matter, people can comment and propose all they want, but seriously ask your self a question, how many hours? days? week? months? or years? have you applied towards the understanding of various payment systems that exist today? Have you ever spoken to them? Understood the back-office and legal issues, met with them in a seminar, etc.

So proposing that Paypal do this or that — is frivolous, (they are way more informed than you and I – combined).

Also – proposing an alternate payment system – how will that fair, if say tomorrow Google checkout becomes a micro-payment system, or the same were to happen with Twitter, or what many consider the inevitable, that Facebook launches either itself or in partnership with someone else, launches an payment/virtual-currency, that allows cross-border settlement and micro-payments? How will you payment system work.

Also remember, Paypal does not allow external payment system to integrate with them.

I do not mean to stomp the idea, but believe me, I have spent many years reading this all and do not make a statement just on heresay, but one that is based on hard statistics, fact and a whole lot of communication.

We may be #3 or #2 on some freelancing project network site, but what are we processing in terms of real-$-value per day? Do we do $30 Million a month – if not – we’re nothing as far as the financial transaction settlement world is concerned – an average ACH in the US transaction more than the $1 Trillion per day (yes, that’s is correct 1 Trillion, and no its not a typo). US ACHs transact more than $30-$45 Trillion per day, depending on the day of the week.

So, swallow your pride and understand and live with what we have. In the fiscal world as far as income – we are NOTHING. Accept that. In the world of RISK, believe me when I say we are almost #1. If people (rather financial institutions are NOT willing to do business here), then there is nothing you can do about it – Government or No-Government Pressure!

Let me give you an analogous example, please bear with me on the humor. The mangoes export of this country is FAR greater in number ($-wise) than say the inward and outward money combined from freelancing. Yet, the US chooses that we cannot export mangoes to the US, and there is NOTHING we can do about it. This has been true for over 25 years. Now – if we cannot export mangoes to the US, then what comical sense do we bring to the table asking Paypal to come here, because we are #2 or #3 on some work portal. [Yes, as an update, I know of the recent mangoes export to the US  -  for the first time.]

Legal Letter from eBay/PayPal – on PayPal Alternatives

After years of writing to PayPal to solicit a reply, which they eventually did (via unofficial channels), I decided to buy a domain called PayPalAlternatives.biz to highlight the alternative payment systems that users can opt for in countries where either PayPal is not available or restricted.

Here is the test of the letter I received:

 

from ip@ebayenforcement.com
reply-to ip@ebayenforcement.com
to babushka99@gmail.com
date Sat, Jun 25, 2011 at 12:30 AM
subject Your Domain Registration – paypalalternative.biz [Case #49847]
mailed-by ebayenforcement.com
Header
Credentials 

We have noted your registration through the local Internet registry in your country of a domain which incorporates the trademark PAYPAL. While we realize that you likely registered the domain with the best of intentions and without awareness of the law in this area, we need to inform you that use of that domain is problematic.

PayPal, Inc. (“PayPal”) does not permit use of its trademarked name PAYPAL in a domain name.

Such use is in violation of international intellectual property regulations and the trademark laws of many countries worldwide.

Additionally, arbitrary use of the word PAL in a domain is problematic if the connected website is used in association with a business making use of PayPal or operating in the same sphere of business as PayPal.

PayPal adopted the name and trademark PayPal in September 1999 and, since that time, PayPal has actively used the PAYPAL name and trademark in connection with its online payment and related services, including maintaining the web sites www.paypal.com and numerous country-specific websites in North America, South America, Europe and Asia. The PAYPAL trademark is one of the most famous trademarks on the Internet.  PayPal owns exclusive trademark rights to the PAYPAL name in many jurisdictions internationally, including related common law rights. Accordingly, PayPal enjoys broad trademark rights in its name.

PayPal has made a substantial investment in developing and providing its services. As a result of PayPal’s pioneering efforts and its devoting substantial effort and resources to providing only high quality services, the PayPal name and trademarks are widely known among the consuming public worldwide, and the name and trademarks embody substantial and valuable goodwill.

While PayPal respects your right of expression and your desire to conduct business on the Internet, PayPal must enforce its own rights in order to protect its valuable and famous trademark. For these reasons, and to avoid consumer confusion, PayPal must insist that you not use the domain name for any purpose, do not sell, offer to sell or transfer the domain name to a third party, and instead simply let the domain registration expire.

We regret any inconvenience caused you, but we require your written confirmation that you will at your earliest convenience discontinue any use of your PAYPAL domain, and will then allow its registration to lapse.

Thank you in advance for your anticipated cooperation.

Best regards,

Edith
eBay Inc.
Legal Department

Now, whilst I really wanted to comment on it, both my US and Pakistani Legal Council has requested I do not do so.

Here was my reply to this email:

Dear Edith,

Thank you for your email. Unfortunately I do not agree to your claim that you have taken on the domain. I would like to counter your arguments, but I have been advised by my legal council against it. I am absolutely sick and tired of the bullying attitude of eBay/PayPal whenever a voice against it is raised. How come paypalsucks.com continues to function. Never mind you need not answer.
Should you wish to initiate any legal proceeding against this domain, that is your prerogative, just as it is mine in return to do the same.
The domain was bought with the intention to highlight in the form of a personal blog, the payment industry systems that stand as an alternates to PayPal and I shall go ahead with that original plan, until and unless legally restrained to do so by a court of law that is recognized.
Regards,
Faisal Khan.

I intend not to be bullied by eBay / PayPal. Both these organization have a lot of explaining to do, and chose to do so, only when they feel its there time to do so. 1,000s of people suffer by the injustice done to their PayPal account everyday  - it is not even funny. If you visit websites like paypalsucks.com, screwpaypal.com and many others, you will get an idea of what I am talking about.

I have full intentions of publishing a personalized blog that highlights the various payment systems, that pose as an alternative to PayPal. If the domain is ever snatched away from me, believe me, a very befitting reply in the form of a large scale campaign against PayPal would be made by me.

I was (and perhaps still am) an ardent lover/fan of the PayPal money system and keep wondering why they continue to shun Pakistan, but when they stoop down to dirty legal arm-twisting like this – rest assured, I too shall twist their arm in return.

PayPal Saga: A Shocking Statistic

Here is some very interesting (read: shocking) statistic for you: (accurate as of 15th January, 2010).

  • Number of Countries in the World: 192 (as per United Nations) [i]
  • Number of Countries in the World: 195 (if we include Kosovo, Vatican City, etc.)
  • US State Department Recognized Countries: 194
  • Number of Countries in which PayPal Operates: 189[ii]
  • Number of Countries that do NOT have Paypal: 5 (as per US State Department’s count)
  • GDP Ranking (as compiled by IMF) for Pakistan for the year 2008 out of 179 Countries is # 48[iii]
  • GDP Ranking (as compiled by World Bank) for Pakistan for the year 2008 out of 182 countries is # 46[iv]
  • Internet Users in Pakistan: 18.5 Million (as per December 2009)[v]
  • Internet users (as a percentage of the population): 10.6%

As of now, PayPal operates in 189 countries, that is like only six countries where Paypal does NOT operate:

  • Cuba
  • Pakistan
  • Iran
  • North Korea, and
  • Afghanistan
  • Syria

So lets see, Cuba has an embargo on trade with the US – has been for past 40+ years, so that is okay.

Iran, North Korea and Syria are “Axis of Evil” countries. So that’s understandable.

Afghanistan – is where the US is fighting it main battle $200+ Billion lost – okay so that is also understandable,

Pakistan – Ah! Pakistan. US’s Non-Nato Ally. Why the heck is Pakistan left out? I mean for crying out loud, even Somalia and Yemen have access to Paypal? Bloody Yemen! Bloody Somalia! Bloody Rwanda!

You know what? That makes me – Bloody Angry!

Why the discrimination – I have no idea. Reminds me of the song by the Pet Shop Boys, “What Have I Ddone to Deserve This?

Here are the list of countries where PayPal is operating:

  1. AL Albania
  2. DZ Algeria
  3. AD Andorra
  4. AO Angola
  5. AI Anguilla
  6. AG Antigua and Barbuda
  7. AR Argentina
  8. AM Armenia
  9. AW Aruba
  10. AU Australia
  11. AT Austria
  12. AZ Azerbaijan Republic
  13. BS Bahamas
  14. BH Bahrain
  15. BB Barbados
  16. BE Belgium
  17. BZ Belize
  18. BJ Benin
  19. BM Bermuda
  20. BT Bhutan
  21. BO Bolivia
  22. BA Bosnia and Herzegovina
  23. BW Botswana
  24. BR Brazil
  25. VG British Virgin Islands
  26. BN Brunei
  27. BG Bulgaria
  28. BF Burkina Faso
  29. BI Burundi
  30. KH Cambodia
  31. CA Canada
  32. CV Cape Verde
  33. KY Cayman Islands
  34. TD Chad
  35. CL Chile
  36. C2 China Worldwide
  37. CO Colombia
  38. KM Comoros
  39. CK Cook Islands
  40. CR Costa Rica
  41. HR Croatia
  42. CY Cyprus
  43. CZ Czech Republic
  44. CD Democratic Republic of the Congo
  45. DK Denmark
  46. DJ Djibouti
  47. DM Dominica
  48. DO Dominican Republic
  49. EC Ecuador
  50. SV El Salvador
  51. ER Eritrea
  52. EE Estonia
  53. ET Ethiopia
  54. FK Falkland Islands
  55. FO Faroe Islands
  56. FM Federated States of Micronesia
  57. FJ Fiji
  58. FI Finland
  59. FR France
  60. GF French Guiana
  61. PF French Polynesia
  62. GA Gabon Republic
  63. GM Gambia
  64. DE Germany
  65. GI Gibraltar
  66. GR Greece
  67. GL Greenland
  68. GD Grenada
  69. GP Guadeloupe
  70. GT Guatemala
  71. GN Guinea
  72. GW Guinea Bissau
  73. GY Guyana
  74. HN Honduras
  75. HK Hong Kong
  76. HU Hungary
  77. IS Iceland
  78. IN India
  79. ID Indonesia
  80. IE Ireland
  81. IL Israel
  82. IT Italy
  83. JM Jamaica
  84. JP Japan
  85. JO Jordan
  86. KZ Kazakhstan
  87. KE Kenya
  88. KI Kiribati
  89. KW Kuwait
  90. KG Kyrgyzstan
  91. LA Laos
  92. LV Latvia
  93. LS Lesotho
  94. LI Liechtenstein
  95. LT Lithuania
  96. LU Luxembourg
  97. MG Madagascar
  98. MW Malawi
  99. MY Malaysia
  100. MV Maldives
  101. ML Mali
  102. MT Malta
  103. MH Marshall Islands
  104. MQ Martinique
  105. MR Mauritania
  106. MU Mauritius
  107. YT Mayotte
  108. MX Mexico
  109. MN Mongolia
  110. MS Montserrat
  111. MA Morocco
  112. MZ Mozambique
  113. NA Namibia
  114. NR Nauru
  115. NP Nepal
  116. NL Netherlands
  117. AN Netherlands Antilles
  118. NC New Caledonia
  119. NZ New Zealand
  120. NI Nicaragua
  121. NE Niger
  122. NU Niue
  123. NF Norfolk Island
  124. NO Norway
  125. OM Oman
  126. PW Palau
  127. PA Panama
  128. PG Papua New Guinea
  129. PE Peru
  130. PH Philippines
  131. PN Pitcairn Islands
  132. PL Poland
  133. PT Portugal
  134. QA Qatar
  135. CG Republic of the Congo
  136. RE Reunion
  137. RO Romania
  138. RU Russia
  139. RW Rwanda
  140. VC Saint Vincent and the Grenadines
  141. WS Samoa
  142. SM San Marino
  143. ST São Tomé and Príncipe
  144. SA Saudi Arabia
  145. SN Senegal
  146. SC Seychelles
  147. SL Sierra Leone
  148. SG Singapore
  149. SK Slovakia
  150. SI Slovenia
  151. SB Solomon Islands
  152. SO Somalia
  153. ZA South Africa
  154. KR South Korea
  155. ES Spain
  156. LK Sri Lanka
  157. SH St. Helena
  158. KN St. Kitts and Nevis
  159. LC St. Lucia
  160. PM St. Pierre and Miquelon
  161. SR Suriname
  162. SJ Svalbard and Jan Mayen Islands
  163. SZ Swaziland
  164. SE Sweden
  165. CH Switzerland
  166. TW Taiwan
  167. TJ Tajikistan
  168. TZ Tanzania
  169. TH Thailand
  170. TG Togo
  171. TO Tonga
  172. TT Trinidad and Tobago
  173. TN Tunisia
  174. TR Turkey
  175. TM Turkmenistan
  176. TC Turks and Caicos Islands
  177. TV Tuvalu
  178. UG Uganda
  179. UA Ukraine
  180. AE United Arab Emirates
  181. GB United Kingdom
  182. US United States
  183. UY Uruguay
  184. VU Vanuatu
  185. VA Vatican City State
  186. VE Venezuela
  187. VN Vietnam
  188. WF Wallis and Futuna Islands
  189. ZM Zambia

[i] Source: http://geography.about.com/cs/countries/a/numbercountries.htm

[ii] Source: Paypal (www.paypal.com) and navigate to Sign-up Page (countries list extracted from there).

[iii] Source: http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

[iv] Source: http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

[v] Source: http://www.internetworldstats.com/stats3.htm#asia

PayPal: Where art thou?


Its that time of the year again when I shall be writing my annual letter to the CEO/President of PayPal and Ebay (Ebay owns Paypal), complaining to them as to why they are not in Pakistan.

Last year I was very hopeful that would reply back (despite writing to them twice). This year, I have much more than a simple letter in mind for them. I almost feel like betting here (that they will reply back, else I shall eat my letter). Note, I said, I ‘almost’ felt like betting.

Anyhow, I am compiling and researching and have almost completed it. I should be penning my thoughts and arguments in the coming days and hope to have the letter go out before the end of January 2010.

Stay tuned.