Entrepreneurship
Twitter is abuzz Paypal may enter SA
Twitter was abuzz with speculation that PayPal is entering SA, in April, by partnering with First National Bank (FNB). However, the move has not been officially confirmed.
PayPal is the faster, safer way to pay and get paid online. The service allows members to send money without sharing financial information, with the flexibility to pay using their account balances, bank accounts, credit cards or promotional financing.
Ironically, for a country that does not have PayPal, the technology was developed by South African Elon Musk who matriculated from Pretoria Boys High School in 1988. He is now CEO of US technology company (Space Exploration Technologies) SpaceX which develops technology for high-profile clients, including US space agency NASA.
At the moment, banking law makes it illegal for a company such as PayPal to operate in SA, unless it successfully applies for a banking licence in the country. However, another option is to join forces with a local bank that already has a licence.
Such a deal would allow the US-based online payment portal to sidestep the onerous foreign exchange requirements that limit the amount of money that can move into, and out of, SA.
PayPal South African opposition, PayFast, says the local market is limited to the number of online users, which is currently five million, according to recent research by World Wide Worx.
"The PayPal system would actually be illegal in SA, unless PayPal were to become a registered bank within the republic," it says. In addition, the cost of setting up a bank and jumping through hoops...read more
Sources: Ashton, M. Fin24.com, (2010); Mawson, N. and Vegter, I. ITWeb, (2010); Eiledon Solutions, (2010)
