PayPal Answers Your Questions: When, Where, and How Will It Expand in the Middle East? [Wamda TV]
After our recent interview with Elias Ghanem, General Manager PayPal Middle East, at the Global Entrepreneurship Summit in Dubai, several of our readers still had questions about PayPal and its availability in the Arab world.
After asking our readers to write their questions to us on hashtag #paypalwamda, we invited Elias to the Wamda office for a quick chat to answer their queries.
Read the full transcript below. The first half of our interview (video below) covers the first five questions on PayPal's functionalities, and the second video (further down) covers PayPal's philosophy and cost structure.
If you have even more questions, tweet us on the #PaypalWamda hashtag, or email email@example.com, and we promise to continue bringing you the inside story on PayPal’s expansion.
Could you give our readers a quick overview on the difference between a consumer and merchant account, where those are enabled, and how one can sign up?
From a consumer perspective, you can open a PayPal account across the GCC, Jordan, Morocco, and Algeria, Tunisia, and Yemen. You can open a merchant account across the GCC and Jordan. Lebanon and Egypt are coming.
As a consumer or as a merchant, signing up is as easy as signing up on paypal.com, adding your first name, last name, address, and a financial payment option: a credit card, a debit card, a prepaid card, Visa Mastercard, American Express, and select a username and email.
To open a merchant account, you can use the same procedure, and you add a payment instrument to withdraw the balance. To withdraw to a card, it must be a Visa card, issued locally by some banks. Check with your bank to see if they allow it.
When is PayPal be fully activated in Lebanon, Egypt, Yemen, Pakistan, and the West Bank?
Egypt and Lebanon will come sometime soon. We are in discussions to make it happen. The West Bank is not yet in the plans anytime soon, and Pakistan is not in my region, so I will not comment on it. Yemen and Tunisia are open for consumer accounts, and sometime soon there will be an update to enable merchant accounts.
When will PayPal have an Arabic interface?
We are, as we speak, working on an Arabic as well as customer service in Arabic as well.
Can users send payments as a gift currently in the Middle East?
P2P, or person to person functionality is not enabled in the Middle East; there must be a good or service underlying the transaction.
How can I connect PayPal to a local bank account, without going through a U.S. bank account or a Visa card?
Today, to withdraw money as a merchant. Either you set up a bank account in the U.S. and withdraw from there, or you link to your account a Visa credit, debit, or prepaid card issued in the Middle East. You cannot withdraw to local bank accounts yet in the Middle East, but rest assured that we are, as we speak, working on different partnership as well as different solutions, and stay tuned, because we will be announcing improvement as we go.
What were PayPal’s initial marketing strategies?
We have two strategies, for consumers and merchants.
For consumers, the biggest issue occurs is that a credit card, issued locally, may not be accepted by merchants overseas. When you link it to a PayPal account, it becomes a PayPal transaction, and you then have 10 million merchants around the world that will accept it.
The second problem for consumers is getting your products back to the Middle East. To solve that, we have a partnership with Aramex. With Shop and Ship, you can buy somewhere else and have it delivered here.
When it comes to merchants, the problem today is that young entrepreneurs need to take their business online and start selling. The problem they face is that traditional players will charge a lot ahead of the transactions- there will be a deposit, and the younger you are as a business, the riskier you will seem, and the more they will charge for the deposit. They will also charge a setup and cost and an ongoing maintenance cost. That’s a lot of cash flow that an entrepreneur needs. Then they will charge you little on a transaction basis.
The PayPal model is exactly the opposite. No deposits, no setup, no maintenance, only a transaction cost. We enable entrepreneurs.
So the cost is all included in the commission fee?
Exactly. Our model is if you don’t sell, you don’t pay. The more you sell, the less you pay. It’s a tiered pricing that merchants can see on the website (www.paypal.ae), under a tab at the bottom called “Fees.” There’s also an infographic on Wamda that explains the fees, which include a percentage and fixed fee per transaction, and a conversion fee when you bring you bring your USD transactions into local currency.
How does PayPal determine which countries to expand into?
For PayPal to expand into a country, the ecosystem must be in place: internet capabilities, phone and GSM and smartphone availability, card penetration, logistics, and market value. All of these pieces are building up quite well in the region, which is why we are in the region now. We are looking to expand into more markets as they mature. The next ones to come will be Egypt and Lebanon.
Do governments play a role in your decisions to expand?
Governments always play a role, and we have extremely good relationships with regulators around the region. Government does not play a direct role in [determining] which market we want to enter, but we engage with regulators and inform them about what we plan to do, and our anti-fraud systems and protections. We always receive good feedback from regulators, because we enable entrepreneurs to take their business online. In a region where unemployment is high, entrepreneuership will be the solution to the problem.
If our readers have any more questions, where should they send them?
Come to Wamda for frequent updates and information, or send us an email at firstname.lastname@example.org, and with pleasure we’ll answer your specific questions.