'Give us the payment option or withdraw!' Olufemi Olaleye is one among 350 Nigerians who signed for in the online petition on PayPal. Amongst other countless online petitions in Change.org, 2285 Ghanians signed a similar petition called 'Enable PayPal in Ghana'. A Sri Lankan petition from the 'PayPal for Sri Lanka' movement has recently passed the mark 6200.
Why?
Millions of small and medium entrepreneurs (SMEs) worldwide engage in e-commerce activities. Online payment gateways are a fundamental component of their business. Convenience, cost effectiveness, security and flexibility has made PayPal a well-known online payment gateway. With 152 million active registered accounts in over 200 international markets, PayPal reports processing 9.3 million payments per day in 2014.
PayPal is not available for any kind of eCommerce activity in twenty UN member countries including countries such as Bangladesh, Ghana, Pakistan as well as the six countries that are under United States trade embargo (Cuba, D.P.R of Korea, Iran, Myanmar, Sudan and Syrian Arab Republic).
The barriers for SMEs using PayPal
Even among other 173 UN member countries, there are numerous barriers to using PayPal. To understand those barriers one has to look at the way PayPal bundles its key services of:
- Sending and receiving money
- Paying with a PayPal account, Bank Account or Credit or Debit card account
- Shopping online.
These services are packaged into three different account types: ‘Personal Account’, ‘Premier Account’ and ‘Business Account’. Among them the Business Account is the most appropriate for on-line merchants. PayPal’s’ business account facility is open to only 73 UN member States. (i.e. this facility is not available for 120 UN member State countries).
With a Premier Account, it is possible to receive money from online transactions (Credit card / Debit card) by selling on-line. This is designed for individuals who are not in full-time business operations. This service is available only in 90 UN member States. In other words, this PayPal service is not available for 103 UN member state countries.
The most widely available account is the ‘Personal Account’. It enables the sending of money online and buying online, and is available to 173 UN member States. Hence the majority of developing countries can only use PayPal to send money or buy online.
Millions of small entrepreneurs around the world are left helpless in their efforts to sell online.
Note: This issue is broadly discussed and documented in the Information Economy Report, (IER) 2015, published by UNCTAD. eNovation4D was responsible for initially bringing this issue to the attention of UNCTAD and subsequently contributed to IER 2015. Download the free Research paper titled 'Forgotten Nations by eCommerce Giants'.
References:
[1] It should be noted that PayPal’s list of ‘countries’ includes many non-UN member States, such as Vatican City, British Virgin Islands, Hong Kong (China) and Taiwan (China).
[2] PayPal account types, by PayPal. 18th Sept, 2014. https://www.paypal.com/us/webapps/helpcenter/helphub/article/?solutionId=FAQ2347
[3] PayPal: Welcome to the Press Centre; 8th Sept, 2014. https://www.paypal-media.com/about
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