Running Head: PayPal in Pakistan
1
PAYPAL IN PAKISTAN
WRCM 102
Section: AD
June 30, 2022
Submitted By:
Submitted To:
Maaiz Bin Waheed
Ma’am Ayesha Fareed
251684212
PayPal in Pakistan
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Introduction
PayPal is an American multinational online financial company. It currently operates in around
200 regions in the world, but Pakistan isn’t one of them. Pakistan is ranked among the top 5
countries when it comes to freelancing (Shabir, 2017), and still, PayPal hasn’t started its
operations in the country. It is the most famous online system in the world, and it has been
growing rapidly since 2002. In the modern era, most university students are learning e-commerce
and are trying to earn income through it. But, before earning money, they should first know how
to bring money back to Pakistan. If they don’t know this they will never be able to do any work.
The trend of freelancing is increasing in Pakistan every year. As PayPal is one of the largest
online transaction system processors in the world (Richter,2021), the purpose of this research is
to analyze PayPal and its effects on the economy of the country and to spread awareness about
PayPal. Every university student who wants to enter the field of freelancing should know about
the problems freelancers come across so that they know how to face these obstacles. Freelancers
can play a significant role in the development of a country, and they can help the government to
earn revenue. The Pakistani Government should bring PayPal to the country as it will help the
freelancers and will also help the government to earn revenue. This paper is a proposal research
paper. In this paper, the proposal I am giving is to bring PayPal to Pakistan for the sake of the
people of Pakistan.
History of Controversy
In 1998 Max Levchin and Peter Theil founded PayPal. It became popular in 2002 after eBay
bought it for $1.5 billion (Richter, 2021). After the emergence of freelancers, a unique
transaction system that could help the freelancers with their transactions became a necessity.
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Thus, PayPal solved this problem. Like other parts of the world, with the rise of the internet, the
e-commerce market started to grow in Asia. And in 2006, PayPal set its foot in Asia. The
concept of freelancing had already started in Pakistan in 2002 but it wasn’t known very well
among the locals. As time passed the E-commerce market started to grow and PayPal had also
entered many Asian countries. At this time, a question arose in the minds of the IT experts and
the people of Pakistan. Should PayPal operate in Pakistan or not?
The answer to this question was not so simple. People had different opinions and both sides had
valid points. In 2015, after Pakistan was removed from FATF’s Grey List and was moved to the
White list, it was the first time that the Government of Pakistan’s IT Minister Anusha Rehman
decided to contact PayPal to start its operations in the state (Bhatti, 2021). But even then there
were differences among the government experts. As a result, when PayPal showed its concerns,
the government didn’t take any serious measures to end its concerns. Then the debate on this
topic started again and in 2019 IT Minister Dr. Khalid Maqbool Siddiqui again contacted PayPal
but it was the same result (Bhatti, 2021).
Status Quo
Even Now in 2022, after 24 years of PayPal’s foundation, it hasn’t yet operated in Pakistani
territory. This means that even after these many years, the government hasn’t been able to decide
whether to bring PayPal to Pakistan or not. If they try to bring PayPal to Pakistan, along with
appreciation there will be opposition to the decision too. The ones who want PayPal to come to
Pakistan are because it is a secure, flexible, easy-to-use online transaction system
(Niranjnamurthy, 2014). On the other hand, there are ones who oppose the idea of bringing
PayPal to Pakistan as it will increase money laundering (Javed, 2020).
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The latest attempt to bring PayPal to Pakistan was in 2019 by the then IT minister (Bhatti. 2021).
According to Javed (2020), the Islamabad High Court asked the Federal Government to bring
PayPal to Pakistan. It has been 2 years since, but no attempt has been made. The current
government has again decided to talk to the company to operate in its territory. According to
current IT Minister Syed Amin ul Haque, the government is going to negotiate with PayPal again
in June 2022.
Currently, there are two opinions and both opinions are from two separate groups of people. The
freelancers want the government to bring it to Pakistan. They are facing many problems due to
the unavailability of PayPal (Javed, 2020). They are having great difficulty bringing money back
to the country. And when they can bring back money they have to pay 10% to 20% of their
earnings to these platforms, whereas they just have to pay 2% to 3% to PayPal (Grigg, 2022). So,
with PayPal in Pakistan, they can earn more and they won’t have to give a large portion of their
earnings to different platforms.
On the other hand, many financial experts reject the idea of bringing PayPal to the country.
According to them, PayPal is a private company, the government cannot regulate it. Without
regulation from the government, PayPal can freeze the accounts of its users without the approval
of the government. Also, as it is an online system, without regulation it will increase money
laundering in the country (Javed, 2021).
Like every controversy, people have different opinions on this matter and both sides are giving
valid points. Even now the status of this controversy is the same as it was 20 years ago. Almost
no change has been made. The only change there is that more people are moving toward bringing
PayPal to Pakistan now and fewer and fewer people believe that government should not bring
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PayPal to Pakistan. At first, there were only 10% to 20% of people who wanted to bring PayPal
but now there are almost 50% to 60% of people who want this.
Language of Controversy
Different people have different opinions on this matter. Some people want the company to come
to Pakistan while others don’t want it to come here. There is a difference in opinions of people
but both sides give valid points. The ones who want it here think about the opportunities it will
bring for local people, whereas the ones who don’t want it here are afraid of the negative impacts
of PayPal such as money laundering and clearance complications. Some other people who will
be affected by PayPal are bankers, people who do online transactions, government officials, and
business owners, especially small business owners.
Concluding Analysis of Literature Review
According to the literature review that was done, the people of Pakistan including the
government officials cannot decide whether to bring PayPal to Pakistan or not. The government
hasn’t been able to take serious steps to lessen the concerns of PayPal. As they are not able to
take a serious decision on this topic, they can’t make policies that will lessen PayPal’s concerns.
The government knows both the pros and cons and PayPal, but they are not able to decide
whether it will have a positive effect or a negative effect on the country. They know that it will
help the freelancers and it will revolutionize the online transaction system of Pakistan, but they
also know that it will increase the money laundering in Pakistan on a very large scale.
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Field Research Plan
The field research plan for this research is to conduct surveys. The surveys will have 10 to 12
close-ended questions to get quick responses. The size of the participants will be a maximum of
25 and a minimum of 20 people. The target audience will be undergraduate business students of
all genders of the age group 18 to 25. As this research is related to business studies so the target
audience will be only business students. This will add an obstacle to the study as the target
audience is small in number and will provide narrow results. As the target audience is specific
and the number of respondents is very small, so this data doesn’t represent the entire population.
Data Analysis
The field research was done using a survey and a total of 23 people responded to this survey. The
data of these 23 respondents were analyzed and the data of 6 out of 11 questions have been
provided below.
Analysis
To understand the point of view of people about PayPal, we asked them about their opinion
about bringing PayPal to Pakistan. We asked them whether PayPal should come to Pakistan or
not.
Around 73.9% of respondents wanted PayPal to come to Pakistan and 21.7% of respondents
rejected the idea to bring PayPal to Pakistan. And some 4.3% of respondents weren’t sure what
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they should choose. According to this result, most people want PayPal in Pakistan.
Analysis
To know the respondent’s opinion on the timeframe in which PayPal can come to Pakistan, we
asked them about how much time it will take for PayPal to come to Pakistan, and we gave them
multiple options to decide from.
Around 43.5% of respondents believed that it will take less than 5 years, 34.8% believed it will
take more than 5 years, 8.7% weren’t sure, and 13% believed that PayPal will never come to
Pakistan.
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Analysis
To understand whether PayPal will be helpful for the freelancers or not, we asked our
respondents this question can PayPal help freelancers? Around 56.5% of the respondents
believed that it will be helpful for freelancers, 30.4% were not sure whether it will be helpful or
not, and 13% believed that it will not affect freelancers. This result shows that more than half of
the respondents think that PayPal will help freelancers.
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Analysis
To understand what people think about the negative impact of PayPal we asked them can PayPal
increase money laundering in the country? Surprisingly 86.9% of the total respondents believed
that it will increase money Laundering in the country, and only 13.1% of the total respondents
believed that it will not increase money Laundering in the country. This shows that around 3/4th
of the people believe that bringing PayPal will increase money laundering.
Analysis
After observing different responses, it was found that 87% of the total respondents believed that
it will boost the economy of Pakistan and only 13% believed that it will not help the economy of
Pakistan to grow. This means that 3/4th of the respondents think that it will boost the economy of
Pakistan.
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Analysis
After the respondents answered multiple questions, the last question was if Paypal comes to
Pakistan will they use it or not. Around 60.9% of respondents chose to use PayPal if it comes to
Pakistan, 21.7% of people chose not to use it even if it comes to the country and 17.4% chose
they may use it or may not use it. This shows that most people will use PayPal if it comes to
Pakistan.
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Data Interpretation
After analyzing both the literature review and the field research, many commonalities were
found in both. In both the literature review and field research, it was seen that bringing PayPal
will help the freelancers. After field research, it was seen that around 56% of the people believe
that it will help freelancers. And the second thing which was proved by field research was that
bringing PayPal will increase money laundering in the country. Around 86% of people believe
that money laundering will increase because of PayPal. But this data only represents a small
portion of the total population so it can not be taken as a representation of the entire Pakistan.
Conclusion
PayPal was founded in 1998 and it set its foot in Asia in 2006. At that time freelancing had
already started in Pakistan. The first attempt that was made by the government to bring PayPal to
Pakistan was in 2016 but it wasn’t successful. The second such attempt was made in 2019 but the
result was the same. Currently, one group believes that the government should bring PayPal
because it will help the freelancers, but the other group refuses this idea as it will increase money
PayPal in Pakistan
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laundering in the country. The freelancers believe that they have to give a lot of money to the
other transaction systems like PayPal, and they can avoid this problem if the government can
negotiate with PayPal to start its operations here. But many financial experts believe that if the
government brings PayPal it will not be able to regulate it. And as there will be no regulation and
as it is an online transaction system it will increase money laundering in the country for which it
was put on the FATF grey list. After analyzing different studies, we can conclude that there are
both pros and cons of PayPal and it depends on the government and the people on how they use
it. The main gap in this paper is that it will only talk about the positive effects of bringing PayPal
to Pakistan not its negative impacts.
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