PayPal entrance bleak for Sri Lanka?

Telecommunication, Digital and Infrastructure Minister Harin Fernando speaks at the National Chamber of Commerce Forum. Others from left are NCCSL Secretary General/CEO Bandula Dissanayake, ICTA MD/CEO Muhunthan Canagey and NCCSL President Thilak Godamanna - Pic by Sameera Wijesinghe

By Shehana Dain

 The local business community will have to muster patience further as PayPal, the giant in the online payment sphere, perceives Sri Lanka to be ‘too small to enter’ and as a result doesn’t depict an attractive profitability ratio for the company, a top Minister said.

However, in a to bid to fill the vacuum for a digital payment gateway, Telecommunications and Digital Infrastructure Minister Harin Fernando said that Stripe, a rapidly-growing newbie providing very similar functions, has shown interest in kicking off operations in the country soon.

Noting that during his visit to the Silicone Valley he got an opportunity to have fruitful discussions with Stripe, a five billion dollar net worth company which has garnered fast-paced success, he said that they even managed to get a slot for a meeting with PayPal heads who agreed to consider drafting a proposal for Sri Lanka in 2017.

“When PayPal came to Sri Lanka a few years back, they didn’t like how the macro environment worked so they went back. Now they are huge and our market is too small for them as a sample. Stripe is an aspiring and innovative new company which is planning on entering this region while we are the first country they’re looking at in this region. Therefore we don’t want to make the same mistake of waiting too long till Stripe gets too big and loses interest in Sri Lanka,” Fernando said at the ‘Meet the Minister’ business meeting organised by the National Chamber of Commerce.

He further stated that after strong lobbying done by top Silicon Valley heads to the top tier of PayPal asking for a favour they managed to score a significant outcome. “I don’t think we would have got an appointment with them if we were not lobbied by the big boys in Silicon Valley. However after some discussions PayPal was willing to list us in the 2017 countries to do business list.”

Stripe has handed over a proposal that has subsequently been submitted to the Central Bank, which is going through it.

In February Central Bank Governor Arjun Mahendran noted that PayPal would enter the country only after the formulation of the new Foreign Exchange Management Act, which could take months owing to the sluggish approval processes.

Responding to queries raised by the ICT business community as to why the Ministry is not taking into account local technologies which facilitate online transactions, the Minister said he did not receive such proposals. Meanwhile Information and Communication Technology Agency of Sri Lanka CEO Muhunthan Canagey said that in the international space when goods and services were being sold they needed assurance when they make payments and reputed gateways like PayPal and Stripe were the need of the hour.

“We will facilitate local players, there is no doubt about it. What we don’t want to do is stop innovation coming into the country. It’s very difficult for us to decide what the people of this country need and we are not going to block anything, we will let them decide. Our plan is to bring in a variety; when we bring in this variety, we have local companies competing with that. We need global online transaction platforms because that’s what foreign buyers trust, not because we want to put Sri Lankan technology companies backwards.”