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PayPal setting up in SL: An unreachable fruit?

09 Jan 2021

Regardless of over six years of “discussions”, the Sri Lankan Government has not made any real progress in getting PayPal set up inward remittances in Sri Lanka, The Sunday Morning Business learns. Sri Lanka began negotiations with US-based PayPal to become its domestic partner bank for inward remittances in 2014, when current State Minister of Money and Capital Market and State Enterprise Reforms Ajith Nivard Cabraal was the Governor of the Central Bank of Sri Lanka (CBSL). When asked about the current status of the Government’s discussions with PayPal, Central Bank Governor Prof. W.D. Lakshman told The Sunday Morning Business that progress on discussions is not open for the public as it would “jeopardize” the whole process of getting PayPal into Sri Lanka. However, he stated that so far there has not been a positive output, but PayPal has shown expression of interest, which indicates positive results. Meanwhile, Information and Communication Technology Agency (ICTA) Chairman Jayantha de Silva told us last week that there has been no progress in these discussions in the recent past. We learnt that the discussions are being conducted by the Central Bank with the PayPal office in India via PayPal’s regional headquarters in Singapore, but India is yet to confirm an all-important visit to the island to meet the relevant officials. Recently, Cabraal tweeted: “I am happy to hear from the Central Bank of Sri Lanka’s Payment Settle Department that PayHere Payments, DirectPay, WEBXPAY, Xoom, Skrill, Payoneer, Earthport and Genie (Dialog) are suitable alternatives to PayPal.” The tweet further added: “Sri Lankan entrepreneurs, please take note.” The tweet raised questions over whether Sri Lanka’s attempts to get PayPal set up here in the country has been abandoned. All our attempts to reach Cabraal for his comment proved futile. However, neither Prof. Lakshman nor de Silva confirmed that the attempts were abandoned. In August 2020, CNSL Director of Payments and Settlements Department D. Kumaratunge told The Sunday Morning Business that the regional PayPal officials are in the process of assessing opportunities in Sri Lanka to grant the PayPal money receiving facility. “The Central Bank is continuing communication with regional PayPal officials to obtain the PayPal facility to Sri Lanka,” Kumaratunge stated. In 2014, negotiations between the parties began and the Central Bank pledged PayPal to ease restrictions to allow inward payments. The Government that was elected in January 2015 neither made any progress in getting PayPal nor publicly discussed the payment platform up until early 2016. In March 2016, the Government announced plans to get “Stripe”, a new start-up reportedly similar to PayPal. The same month, then Minister of Telecommunications and Digital Infrastructure Harin Fernando stated that Sri Lanka will gain inward access to PayPal from 2017 onwards as the Government managed to “convince” PayPal. But PayPal did not enter the country in 2017 and no reasons were provided for this. In March 2018, Sri Lanka was developing a National Financial Inclusion Strategy (NFIS) to facilitate online payment gateways and digital financial services. In October the same year, the Government said that it was changing laws so that tech industry workers can receive payments from PayPal by 2020. Talks about getting PayPal came to the forefront once again recently, ahead of the election. Nevertheless, after years of attempts, PayPal is yet to even inform their requirement to come into Sri Lanka, according to Kumaratunge. It has also been reported that the Indian PayPal officials were unresponsive to attempts made by the Central Bank to revive talks on getting PayPal into Sri Lanka. Therefore, the Central Bank had to contact the regional headquarters in Singapore, through which the Central Bank was able to reach the Indian officials. After this, Indian officials had expressed their intention to visit Sri Lanka. In 2017, the Central Bank stated that PayPal has been hesitant over the years as there will be low transaction volumes and certainly not because of regulatory limitations. Nevertheless, the ICTA a few years ago stated that PayPal is reluctant to venture into Sri Lanka due to complexities in Sri Lanka’s “draconian” Exchange Control Act. PayPal Holdings, Inc. is an American company operating a worldwide online payments system that supports online money transfers and serves as an electronic alternative to traditional paper methods. Located in San Jose, California, PayPal was founded in 1998. PayPal is the global leader in online payment solutions with more than 267 million accounts worldwide and available in 202 countries and 25 currencies around the world. Sri Lankans have been using PayPal for outward remittances, but receiving inward remittances has long been a struggle for ecommerce businesses, graphic designers, web developers, and ICT professionals.

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