PayPal is Making a Comeback to Ghana, Nigerian FinTechs Should Be Very Worried!
This is a moment of obvious joy for merchants in Ghana as global payments giant, PayPal, is making a re-entry into the West African country!
This news made headlines after the recent launch of Ghana’s first mobile money payments interoperability system this month. Speaking at the launch, the country’s Vice President announced that Ghana will become PayPal-compliant soon.
— KTKY (@Kwatontoh) May 30, 2018
With this news, Ghanaians would get full access to PayPal’s services to receive and send money to any country in the world.
What Does it Mean to be PayPal-Compliant?
PayPal is the world’s biggest and most widely accepted online payments processor. It’s services are well integrated into the banking systems of various countries and is used by millions of customers in over 200 countries. PayPal is easy to setup, and is used by ecommerce sites, auction sites, and many other types of websites.
— Guy Free (@freeeeestyle) May 30, 2018
However, PayPal has blacklisted a host of countries from using its services or some of it. Ghana, like a lot of African countries, falls under this category. The blacklisted countries earned the status for different reasons. Nigeria, for instance, despite being the largest economy in Africa, appeared to have been blacklisted due to high levels of Internet fraud.
@AskPayPal i dont why you still wont give me an answer to why Ghana isnt eligible for paypal accounts
— Lucas Nluki (@ghpromotr) May 29, 2018
Now, Ghana has intensified its efforts to become a PayPal-compliant country. With the launch of the mobile money interoperability system, Ghana has developed a framework for payments integration.
According to Ghana’s Vice President,
“This presents exciting opportunities for Ghana, and we should take full advantage of it. We should see, amongst other developments, a major boost in e-commerce in Ghana. We are building a new and modern economy. It is now up to us, the Bank of Ghana, GHIPSS, Banks, Fintechs, Telcos and Merchants to make this happen within this time frame and also to prepare for the opportunities it presents.”
Planned in two phases, PayPal’s re-entry into Ghana begins in the second half of 2019. Full integration would be completed by the first half of 2020.
Nigerian Fintechs Could Be in Big Trouble
PayPal’s re-entry into Ghana is really big news, and a worrying news for local payment processors in Nigeria. For long, payment firms like ETranzact, Flutterwave and PayStack have been big players in the industry. However, they have only succeeded in making it easier for people to send money domestically or abroad.
Good luck with that.
This problem started in 2007 when PayPal cut us off saying it doesn’t want to deal with Nigeria. Took it to govt- didn’t show any interest or understanding
— Dr Aloy Chife (@ChifeDr) May 13, 2018
Notwithstanding, there’s still plenty of difficulty when trying to receive payments from abroad. This difficulty significantly affects freelancers and other local businesses involved in international transactions.
To receive foreign payments, people either have to wait for days for domestic banks to process the payments, use Western Union, or use other alternatives. PayPal is also an alternative, but not if you use Nigerian details. Presently, Nigerians can only pay out, but cannot receive payments.
Lost a client that would have guaranteed me at least $2500 monthly because PayPal has blacklisted Nigeria and Noble Igwe is the bad guy?
— EAO (@Eseoghene_andre) May 12, 2018
So if PayPal were to make a full re-entry into Nigeria, it would have a lot of impacts. The processor is already hugely popular, and very trusted. This puts the existing solutions at some disadvantage. The truth is, if existing players don’t innovate quickly enough, they could die out quickly.
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