PayPal in South Africa

Why we need it but can’t have it. Jon Edwards argues government has failed us.

By - January 8, 2010 Share on LinkedIn
PayPal in South Africa

Living and working in and from South Africa has its obvious perks, but of late has become somewhat of a nuisance – particularly in my line of work, which is mostly web?based. The nuts and bolts of the issue is that I, along with countless other frustrated South Africans, cannot trade online with international clients. This is, well… a big problem.

What is PayPal? Well, PayPal says: “PayPal is the safer, easier way to pay and get paid online. The service allows anyone to pay in any way they prefer, including through credit cards, bank accounts, buyer credit or account balances, without sharing financial information.”

Having done a little bit of homework about the cause of the problem online, it appears the answer is a bit oblique. Some say PayPal does not meet the Reserve Bank’s Forex requirements. Others say that PayPal has simply given up on pursuing the matter any further with our banks and Sars, as we – South Africa – would make up less than 1% of their global sales.

Why bother? It’s estimated by PayFast (South Africa’s supposed answer to PayPal) that the number of online users in South Africa is 4.6m , which falls well short of even Egypt with 12.6m. Then there are those on the far left that have dubbed it a bank conspiracy. I believe it’s all three, and that this is another example of government failure in this country.

In the current economic climate, and in a time where South African’s are about to receive huge publicity from the World Cup of Football, should we really be excluding ourselves outright from the global market’s biggest commercial growth area? And for what? I suspect so that our government and banks can cling onto some outmoded exchange and tax regulations in fear that, god forbid, a few people don’t declare all their earnings.

Here’s a little tidbit for you from; “The South African Revenue Service (Sars) received a record four million tax returns for individuals and trusts during the 2009 tax season.” – I’d like to add, from a population of about 46m people. It’s also estimated by Unisa’s Bureau of Market Research that, in 2005, the “second economy” spent roughly R15.9bn on informal transport (mostly taxis) – who’s taxing and monitoring that?

Yes, our banking and tax regulations have protected us quite a bit in recent months, but it makes no sense that they’re happy to let us send our hard?earned money out of the country – using PayPal’s payment gateway – to purchase stuff online, but not allow us to bring money back in by selling stuff online… …even when said “stuff” is delivered electronically via downloads.

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