After much back and forth over the past two years, PayPal is finally gearing up to launch in Bangladesh by the end of April.
“We just received the permission today [Monday]. Now we will go forward with the necessary procedures, including the signing of a formal agreement with PayPal, so that the service comes into operation soon,” a highly placed source at Foreign Remittance Management Division of Sonali Bank told the Dhaka Tribune.
According to another official source, all necessary processes, including the cross-checking of documents, legal compliance and the finalisation of terms and conditions have been completed.
A tripartite deal among Bangladesh Bank, Sonali Bank and PayPal will be signed soon.
Once the agreement is signed, the IT division of Sonali Bank will complete all necessary IT-related tasks, including the type of account to be used and AML/CFT (Anti-Money Laundering/Combating the Financing of Terrorism) compliance status.
Sonali Bank Managing Director and Chief Executive Officer Md Obayed Ullah Al Masud and Bangladesh Bank's Deputy Governor Abu Hena Mohd Razee Hassan were, however, not available for comment.
Earlier in July 2016, Sonali Bank and PayPal signed a draft Memorandum of Understanding (MoU), which had been sent to PayPal for approval.
Since its start in December 1998, PayPal has enabled nearly 200 million individuals and businesses to transfer funds electronically.
PayPal, which is available in more than 200 markets around the world, enables its account holders to receive money in more than 100 currencies, withdraw funds in 56 currencies and hold PayPal account balances in 25 currencies.
Its presence in Bangladesh will now provide a hassle-free electronic channel for the transfer of money from one country to another, the influx of remittances and earnings from foreign companies and increase access to foreign consumers.
“Most Bangladeshi freelancers cannot bring their hard-earned money in through the proper channels due to a lack of a trusted and government-approved payment gateway,” BASIS President Mostafa Jabber told the Dhaka Tribune.
Currently, there are about 550,000 freelancers and about 700 e-commerce websites in Bangladesh.
At present, these local freelancers use middlemen to bring in their foreign income, a move which is both risky and comes at a high cost. Their income is also considered part of the inflow of remittances.
With PayPal in the country, this will no longer be an issue. Not only will it be easier and safer for freelancers to collect payments from foreign clients, but their incomes will now also be considered separate from remittances.
“I welcome PayPal's entry in Bangladesh as this will highly benefit the country's freelancers who have trouble bringing in their earnings safely,” said Shamim Ahsan, former president of Bangladesh Association of Software and Information Services (BASIS).
Bangladesh has also been facing much difficulty in receiving remittance earned through outsourcing, and this new contract with PayPal will make the remittance inflow both easier and faster.
E-commerce entrepreneurs can now also look beyond the country's borders and connect with the foreign market, effectively pushing Bangladesh into the global shared economy.
“PayPal is the most secure and the best payment gateway for monetary transactions. PayPal in Bangladesh will help e-commerce entrepreneurs to connect with more consumers from foreign countries,” said Ataur Rahman, co-founder of amardeshamargram.com, an e-commerce business.
Razib Ahmed, president of e-Commerce Association of Bangladesh (e-CAB), said PayPal would help the entrepreneurs to expand their businesses by ensuring that they are easily able to receive payments for work both at home and abroad.
This move is a part of the government's vision to establish a resourceful and modern country through the effective use of information and communication technology by 2021.