Salman F Rahman, private industry and investment adviser to the prime minister, mentioned this to reporters during his visit to a Walton factory
After much speculation and several false starts, popular online payment system PayPal is said to be launched in Bangladesh by December, at the end of this year.
Salman F Rahman, private industry and investment adviser to the prime minister, mentioned this to reporters during his visit to a Walton factory at Chandra in Gazipur on Saturday.
A Walton official, however, clarified to Dhaka Tribune that Walton was not involved with PayPal and its Bangladesh operations in any way.
The prime minister's adviser simply made the announcement when asked by a reporter after his factory visit was over, he added.
In 2016, Sonali Bank was said to sign a memorandum of understanding (MoU) with PayPal, allowing it to launch its operation in Bangladesh.
Even the ICT Ministry was rumoured to launch the platform in Bangladesh several times.
In an event organized by the ICT Division in 2017, it was claimed that PayPal would officially be inaugurated on October 19 that year.
However, PayPal had disputed the claim then with its website forum stating the following to a response: "PayPal is not currently available in Bangladesh and we don't have news to share right now regarding future plans. However, Xoom, a PayPal service, has been live in Bangladesh since November 2015. Through Xoom, people in the US can send money to loved ones by depositing money to leading banks in the country"
The ICT ministry actually launched Xoom, an online money transfer system that was acquired by PayPal and already operating in Bangladesh from November 2015, in collaboration with Social Islami Bank.
While PayPal is a digital payment system that offers certain features, Xoom is a money transfer platform like that of Western Union which involves bank transfers and ends up being costlier.
Bangladeshi freelancers, who make up the largest freelancing population of the world, were unenthusiastic, as Xoom did not meet their expectations accordingly, something that PayPal easily could have.
“Although Xoom was dubbed a substitute for PayPal, it was not actually the case as a user cannot use his PayPal balance to pay for a Xoom transaction. One can only use PayPal's log-in credentials, and thereby, the bank account, credit or debit card associated with it for Xoom transactions. This means Xoom will use information of the debit or credit card users which my foreign clients do not want to do and hence prefer PayPal,” explained Brohi Khondoker, a freelancer.
“Some work requires payment in advance because of the nature of the work outsourced to us, which Xoom does not allow. Moreover Paypal is deemed to be safe for both clients and freelancers, and my clients also do not have to open a separate account for Xoom,” explained another freelancer.
According to the ICT Division, there are 650,000 freelancers in Bangladesh, of which 500,000 are actively working.
Bangladesh also ranked 8th In the 2019 Global Gig-Economy Index published by Payoneer.
Freelancers in the country are bringing in Tk850 crore annually, according to official data which use marketplaces such as Fiverr, Upwork, etc. having the most clients from the US who mostly prefer Paypal.
According to Paypal, more than 200 million individuals and businesses have transferred funds electronically since its launch in the US in December 1998 with its service available in more than 200 markets around the world allowing users to receive money in more than 100 currencies, withdraw funds in at least 56 currencies and hold PayPal account balances in 25 currencies.
Market insiders believe that PayPal's arrival in Bangladesh will pave the way for hassle-free electronic fund transfer, increase access to foreign consumers and ease the influx of remittances and earnings from foreign companies.
However, bureaucratic complexities have so far been holding it back. If authorities want to bring Paypal and help the local IT freelancers, they should continue to work on removing obstacles to allowing PayPal to operate in the country.
“One of the primary reasons for the non-existence of PayPal in Bangladesh is our framework which needs to be addressed. Our financial policy puts a restriction on outbound transactions, which is incompatible with how PayPal works,” explained Syed Almas Kabir, President of BASIS.
“Furthermore, it will not just enhance the life of IT freelancers, it will help entrepreneurs to expand their businesses by ensuring that they are easily able to receive payments for work both at home and abroad,” he added.