Introduction
PayPal, a leading online payment system, is planning to enter the Pakistani market through a partnership with an existing international payment gateway. This will enable the international clients of Pakistani freelancers to pay them through their PayPal accounts.
The announcement of the joint venture is expected to be made next week, according to the Caretaker Minister for IT and Telecom, Dr Umar Saif. He said that PayPal will operate indirectly in Pakistan through this collaboration, which will benefit the growing freelance sector in the country.
Background
Pakistan has a large and vibrant freelance community, which ranks fourth in the world in terms of size. According to a report by Payoneer, a global payment platform, Pakistan has around 1.5 million freelancers, who earned $1 billion in 2020.
However, the freelancers face many challenges in receiving payments from their international clients, due to the lack of reliable and convenient online payment options. PayPal, which is widely used by freelancers and online businesses around the world, does not operate in Pakistan, due to security and regulatory issues.
The previous governments have tried to persuade PayPal to launch its services in Pakistan, but to no avail. The freelancers have resorted to using alternative methods, such as bank transfers, wire transfers, money transfer services, or third-party platforms, which are often costly, time-consuming, or risky.
Benefits
The partnership between PayPal and an international payment gateway will address the payment woes of the Pakistani freelancers, and open up new opportunities for them. Dr Umar Saif said that the initiative will have a positive impact on the IT sector, which is one of the fastest-growing sectors in the country.
He said that the IT exports of Pakistan have increased by 13% in November 2023, and the government aims to double the IT exports from $2.6 billion to $5 billion by 2025. He attributed the positive trend to the recent measures taken by the government to support a liberal financial regime for the IT sector.
One of these measures is allowing the IT companies to retain 50% of their export revenue in dollars in a local account, which will facilitate the international payments and reduce the currency risk. Dr Umar Saif said that this will also encourage the IT companies to invest more in the local market and create more jobs.
Conclusion
The partnership between PayPal and an international payment gateway is a welcome development for the Pakistani freelancers, who have been facing difficulties in receiving payments from their international clients. The collaboration will not only ease the payment process, but also boost the IT sector, which is a key driver of the economy. The announcement of the joint venture is expected to be made next week, and the freelancers are eagerly waiting for the launch of the PayPal service in Pakistan.