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
Pakistan E-Commerce Survey: We are trying to document the anatomy of Pakistan’s E-Commerce ecosystem. If you are a resident Pakistani and/or Pakistan affiliated in any manner, Please take 3 minutes out and fill this and share.
The results of the survey would be open for all, including the raw data (minus Names/Emails). Every person who fills this out – counts! Your valuable time and input is highly appreciated.
Thanking you in advance.
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
January 16th 2013.
David A. Marcus
2211 North First Street
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
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.
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.]
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:
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.
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:
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.
For many years now – I have been writing to the CEO/President of PayPal and their parent company Ebay, asking then why they are not present in Pakistan. Despite all the communication via email, faxes, and letters that I dispatch every year, I have never managed to solicit a reply from them. Not even a squeak.
Today, many campaigns are afoot on the Internet in the hopes of getting PayPal’s attention and getting them to come to Pakistan.
Some people are supposedly even in touch with PayPal through their Far East office, London office or US office. Some have claimed to have met them, each vying to bring PayPal to Pakistan. In some minor cases, some of these elements are just not playing fair and present a fair picture to PayPal. They do so because they want to do business with PayPal and get paid for it (hint: law firms), others want accolades, etc. Just for the record, I want none. I just want them to be here.
Today, people fly to Singapore,Dubai, London and even the US to open a bank account just so that they can have a PayPal account.
Most of the activity that is done on PayPal on behalf of Pakistan is done so by what I call Acquaintance-PayPaling! – i.e. using the PayPal account of your brother, sister, uncle, niece, cousin, friend, relative, associate, etc.
Coming back to topic – the present situation is – we still do not have PayPal in Pakistan. Rumor mills are abound with the reasons why PayPal is not in Pakistan. I will not go there, but perhaps try to address what in my opinion I believe is stopping PayPal from coming to Pakistan.
PayPal as you know operates in quite a few countries. In our immediate region, i.e. South Asia, large economies like Pakistan, Bangladesh, Sri Lanka, etc. do not have PayPal, yet countries like Rwanda, Botswana, Fiji, Panama, Sierra Leone, Tonga and Zambia have access to PayPal.
Even Yemen and Somalia have access to Paypal.
Is this fair? Certainly not!
PayPal’s reluctance to operate in Pakistan is due to Anti-Money Laundering and Terrorist activities.
It is also rumored (I cannot confirm this), that there is a strong Indian lobby, that very tactfully yet and with sane reasoning positions Pakistan as a country which PayPal best avoids, despite the numbers that work in favor for PayPal to operate here.
No one – on their own wants to take ownership within PayPal and convince the New Business Development Department and the Legal team that Pakistan holds the potential of a very strong market for PayPal.
Having said this, there are some genuine people in PayPal who are literally fighting a case for Pakistan. I wish them good luck and request that they read on what I have written below.
So to summarize:
- PayPal wants to do business in Pakistan, but are hesitant due to AML and for it (PayPal services) to possibly be used for terrorist activities.
- People in Pakistan desperately want PayPal.
There are three concerning bodies in Pakistan that PayPal needs to get in touch with:
- State Bank of Pakistan (the central bank of Pakistan)
- Pakistan Remittance Initiative – a semi-autonomous body within SBP that is focused on inward remittances and how to legalize them, and provide better KYC, etc.
- FMU – Financial Monitoring Unit – the AML arm of SBP.
In an unofficial capacity I can state, that all three are willing to talk to PayPal and pacify and address their concerns which prevents them from operating in Pakistan.
Especially PRI – the folks at PRI are more than willing to sit and listen to PayPal and advice them of our laws that we have in place and to correct any misconceptions that they might have with respect to Pakistan. They can help you get PayPal services rolled out at a National level – and under a one-window operation for PayPal.
PRI is the most pertinent body that can help PayPal and will guide you if you need a banking license or a money-exchange license, how to get incorporated (if required by SECP) how to get integrated with the two ATM switch operators in Pakistan: 1Link and MNet – I’m very sure PRI will also help PayPal with any Tax related issues / consultation with the Tax Authorities (i.e. FBR).
Sitting in a cubicle in California – things are a whole lot different when Pakistan is viewed as a potential country to do business with. It would be conniving of PayPal not to get in touch with PRI / SBP / FMU – all three which operate under the auspices of Ministry of Finance and have the hurdles addressed.
Sitting in Pakistan, you cannot fathom our disbelief that we are blatantly being ignored by PayPal - the silence to all the communication/campaigns is deafening.
10+ years of PayPal and no service in Pakistan is just not fair to the 20 million internet users here. We are NOT a camel country! We don’t have sand dunes and people sitting in huts squatting flies. We are not running around naked in sewers begging for water. We do have almost all the conceivable luxuries and infrastructure that is prevalent out in the West. Especially digital infrastructure.
For god’s sake, stop being obtuse PayPal and open your eyes!
For good order’s sake – study us, and do your homework. We are the largest Non-Nato partner for the US in this war against terror. You really think that terrorist networks are only existing in Pakistan? they are all over the world – including UK, Germany, France, Somalia, Yemen, Rwanda, South Africa, Canada, countries where you operate. And please, do not associate the word terrorist with “Islam” or “Muslim” god knows how many home grown terrorist organizations are out there. Juxtaposing such labels on Pakistan is unfair, uncalled for and plain myopic business attitude. Radical white supremacist are gaining numbers everyday in Germany and Austria and UK, do you not consider them when you do business there? India has its own share of problems as far as terrorist organizations are concenred – including the Indian Maoist movement known as the Naxalites, but that does not stop PayPal from operating there now does it? So please think rationally when it comes to Pakistan and stop generalizing and compartmentalizing us.
Pakistani individuals and small businesses are making great strides on freelancing portals (like Elance, oDesk, RentaCoder, etc.) and other web outsourcing platforms where they deliver fantastic services.
The very least PayPal can do – is to get in touch with the right institutions here in Pakistan and work with them to have their issues addressed. Until and unless PayPal will not take the first step, the Government of Pakistan and its institutions are helpless, not to mention the 20 million Internet users and the nearing 100 million cellphone users. We as citizens can only do our digital protest in the hopes we get your attention – the walk you must walk!
If anyone in PayPal is reading this, please get in touch with myself, at fk (at) faisalkhan (dot) com and I shall duly put you in touch with the three institutions I mentioned. I do with without any self-servicing agenda or motive. I too like everyone else would like PayPal to be present in Pakistan.
Its been too long for us not to have PayPal and you have it within yourselves, the power, the will and determination to change that for the 20 million Internet users in Pakistan.
"Hope is not a dream but a way of making dreams become reality."
- L. J. Suenens
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:
- North Korea, and
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:
- AL Albania
- DZ Algeria
- AD Andorra
- AO Angola
- AI Anguilla
- AG Antigua and Barbuda
- AR Argentina
- AM Armenia
- AW Aruba
- AU Australia
- AT Austria
- AZ Azerbaijan Republic
- BS Bahamas
- BH Bahrain
- BB Barbados
- BE Belgium
- BZ Belize
- BJ Benin
- BM Bermuda
- BT Bhutan
- BO Bolivia
- BA Bosnia and Herzegovina
- BW Botswana
- BR Brazil
- VG British Virgin Islands
- BN Brunei
- BG Bulgaria
- BF Burkina Faso
- BI Burundi
- KH Cambodia
- CA Canada
- CV Cape Verde
- KY Cayman Islands
- TD Chad
- CL Chile
- C2 China Worldwide
- CO Colombia
- KM Comoros
- CK Cook Islands
- CR Costa Rica
- HR Croatia
- CY Cyprus
- CZ Czech Republic
- CD Democratic Republic of the Congo
- DK Denmark
- DJ Djibouti
- DM Dominica
- DO Dominican Republic
- EC Ecuador
- SV El Salvador
- ER Eritrea
- EE Estonia
- ET Ethiopia
- FK Falkland Islands
- FO Faroe Islands
- FM Federated States of Micronesia
- FJ Fiji
- FI Finland
- FR France
- GF French Guiana
- PF French Polynesia
- GA Gabon Republic
- GM Gambia
- DE Germany
- GI Gibraltar
- GR Greece
- GL Greenland
- GD Grenada
- GP Guadeloupe
- GT Guatemala
- GN Guinea
- GW Guinea Bissau
- GY Guyana
- HN Honduras
- HK Hong Kong
- HU Hungary
- IS Iceland
- IN India
- ID Indonesia
- IE Ireland
- IL Israel
- IT Italy
- JM Jamaica
- JP Japan
- JO Jordan
- KZ Kazakhstan
- KE Kenya
- KI Kiribati
- KW Kuwait
- KG Kyrgyzstan
- LA Laos
- LV Latvia
- LS Lesotho
- LI Liechtenstein
- LT Lithuania
- LU Luxembourg
- MG Madagascar
- MW Malawi
- MY Malaysia
- MV Maldives
- ML Mali
- MT Malta
- MH Marshall Islands
- MQ Martinique
- MR Mauritania
- MU Mauritius
- YT Mayotte
- MX Mexico
- MN Mongolia
- MS Montserrat
- MA Morocco
- MZ Mozambique
- NA Namibia
- NR Nauru
- NP Nepal
- NL Netherlands
- AN Netherlands Antilles
- NC New Caledonia
- NZ New Zealand
- NI Nicaragua
- NE Niger
- NU Niue
- NF Norfolk Island
- NO Norway
- OM Oman
- PW Palau
- PA Panama
- PG Papua New Guinea
- PE Peru
- PH Philippines
- PN Pitcairn Islands
- PL Poland
- PT Portugal
- QA Qatar
- CG Republic of the Congo
- RE Reunion
- RO Romania
- RU Russia
- RW Rwanda
- VC Saint Vincent and the Grenadines
- WS Samoa
- SM San Marino
- ST São Tomé and Príncipe
- SA Saudi Arabia
- SN Senegal
- SC Seychelles
- SL Sierra Leone
- SG Singapore
- SK Slovakia
- SI Slovenia
- SB Solomon Islands
- SO Somalia
- ZA South Africa
- KR South Korea
- ES Spain
- LK Sri Lanka
- SH St. Helena
- KN St. Kitts and Nevis
- LC St. Lucia
- PM St. Pierre and Miquelon
- SR Suriname
- SJ Svalbard and Jan Mayen Islands
- SZ Swaziland
- SE Sweden
- CH Switzerland
- TW Taiwan
- TJ Tajikistan
- TZ Tanzania
- TH Thailand
- TG Togo
- TO Tonga
- TT Trinidad and Tobago
- TN Tunisia
- TR Turkey
- TM Turkmenistan
- TC Turks and Caicos Islands
- TV Tuvalu
- UG Uganda
- UA Ukraine
- AE United Arab Emirates
- GB United Kingdom
- US United States
- UY Uruguay
- VU Vanuatu
- VA Vatican City State
- VE Venezuela
- VN Vietnam
- WF Wallis and Futuna Islands
- 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).
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.