-By A Staff Writer
(Lanka-e-News -15.Dec.2024, 11.00 PM) If Sri Lanka’s relationship with PayPal were a rom-com, it’d be a tragic one-sided love story. Picture this: Sri Lankans are eagerly sending money abroad through PayPal, buying products, services, and subscriptions from around the world. But when it comes to receiving payments from overseas for their hard work or exports, they’re left standing outside PayPal’s proverbial door, locked out, with no key in sight.
Why is this the case? It’s a story as old as Sri Lankan bureaucracy—an intricate web of outdated policies, protectionist attitudes, and banks protecting their cash cows. Let’s dive into this amusing yet frustrating saga.
For the uninitiated, PayPal is the world’s leading online payment platform, with over 430 million users. It allows individuals and businesses to send and receive money with ease, transcending borders and converting currencies. However, in Sri Lanka, PayPal operates with one major limitation: Sri Lankans can send money outwards but cannot receive payments into their PayPal accounts from overseas.
This setup creates a bizarre paradox: Sri Lanka happily allows foreign exchange to flow out of the country via PayPal but blocks its citizens from receiving inward remittances through the same platform.
You might be tempted to point fingers at PayPal, assuming the global giant doesn’t see Sri Lanka as a priority market. But hold on—PayPal isn’t the bad guy here. The real antagonist is closer to home: the Central Bank of Sri Lanka (CBSL) and, indirectly, the commercial banks that influence its decisions.
The Central Bank regulates payment gateways and has, for nearly a decade, refused to authorize PayPal for inward payments. The reason? Follow the money.
Sri Lanka’s commercial and state banks are fiercely protective of the commissions they earn from processing foreign exchange inward remittances. Every dollar that comes into Sri Lanka via traditional banking systems—whether it’s for an exporter, a freelancer, or a small business—passes through these banks, and they take their cut.
If PayPal were allowed to handle inward payments, it would bypass this lucrative system. Instead of going through bank channels, exporters and freelancers could receive payments directly into their PayPal accounts, paying minimal fees. For the banks, that’s a revenue stream they’re not willing to lose without a fight.
Blocking PayPal inward payments might protect banks’ profits, but it’s hurting the country in multiple ways:
1. Missed Opportunities for Small Businesses: Sri Lanka is home to a growing number of talented individuals and small businesses eager to tap into global markets. Whether it’s selling handwoven sarees, digital artwork, IT services, or even hosting online yoga classes, these entrepreneurs are struggling to find affordable and efficient ways to get paid.
2. A Thriving Black Market: When legitimate channels fail, people find workarounds. Many Sri Lankans are resorting to dubious third-party payment services or using PayPal accounts linked to foreign bank accounts to receive their money. This practice is neither secure nor sustainable, and it deprives the country of much-needed foreign exchange.
3. A Foreign Exchange Drain: Here’s the irony: While the government blocks inward payments, outward payments flow freely. Sri Lankans can buy anything from Amazon, eBay, or other global platforms using PayPal, sending foreign exchange out of the country. At a time when Sri Lanka is desperately trying to shore up its foreign reserves, this imbalance is both illogical and harmful.
Allowing PayPal inward payments is not just a demand from a handful of tech-savvy freelancers or exporters—it’s a move that could benefit the entire country.
1. Empowering Entrepreneurs
Freelancers, small business owners, and exporters would finally have access to a reliable, low-cost payment gateway. This would encourage more Sri Lankans to participate in global markets, boosting their incomes and contributing to the economy.
2. Increasing Foreign Exchange Inflows
With PayPal enabled for inward payments, the country could attract millions of dollars in foreign exchange from the Sri Lankan diaspora and international customers. Currently, much of this money is lost to informal channels.
3. Simplifying Transactions
For businesses and individuals, PayPal offers unmatched convenience. It eliminates the need for complicated banking processes, saving time and reducing costs.
President Anura Kumara Dissanayake’s government has promised reforms and a more progressive economic approach. The PayPal issue offers an opportunity to prove its commitment to small businesses, freelancers, and the country’s economic revival.
Allowing PayPal inward payments would send a strong signal to the world that Sri Lanka is open for business. It would position the country as a hub for digital freelancers, e-commerce entrepreneurs, and creative professionals—sectors that could thrive in Sri Lanka’s well-educated, English-speaking workforce.
Of course, the commercial banks aren’t going to give up without a fight. They argue that allowing PayPal inward payments would hurt their bottom lines, leading to job losses and reduced profitability in the financial sector.
But this argument doesn’t hold water. Instead of fearing competition, banks should see PayPal as an opportunity. By integrating PayPal into their systems and offering value-added services, banks can remain relevant while still benefiting from increased foreign exchange inflows.
Let’s take a moment to appreciate the absurdity of the current system:
• Sri Lankan businesses selling products to the diaspora are forced to rely on clunky bank transfers, which are slow, expensive, and bureaucratic.
• Freelancers often resort to setting up foreign PayPal accounts through friends or relatives, turning a straightforward process into a James Bond-level operation.
• Meanwhile, Sri Lankans are happily buying gadgets, streaming subscriptions, and K-pop merchandise with their PayPal accounts, sending foreign exchange out of the country without a second thought.
It’s like having a tap that only lets water flow one way—hardly a recipe for economic success.
Sri Lanka isn’t the only country grappling with PayPal policies. However, most nations have embraced PayPal for inward payments, recognizing its potential to boost entrepreneurship and foreign exchange earnings.
India, for instance, allows full PayPal functionality. Indian freelancers and businesses have used the platform to rake in billions of dollars in exports, contributing to the country’s economic growth. Even smaller economies like Bangladesh and Nepal have taken steps to integrate PayPal, leaving Sri Lanka lagging behind.
The call for PayPal inward payments isn’t just coming from tech-savvy millennials or urban entrepreneurs. It’s a demand echoed by Sri Lankans across the board—from rural artisans selling crafts online to musicians earning royalties from international platforms.
Social media campaigns, petitions, and lobbying efforts have been ongoing for years, but the government and Central Bank have yet to budge. Perhaps it’s time for policymakers to log into PayPal themselves and see what the fuss is all about.
The PayPal inward payment issue is more than just a financial inconvenience—it’s a symbol of the bureaucratic hurdles and outdated thinking that hold Sri Lanka back. In a world that’s increasingly digital and interconnected, blocking access to a platform like PayPal is akin to shooting oneself in the foot.
President Dissanayake and the NPP government have a golden opportunity to break this deadlock and empower Sri Lankans to compete on the global stage. Allowing PayPal inward payments isn’t just a policy change; it’s a statement of intent—that Sri Lanka is ready to embrace the future, one payment at a time.
Until then, Sri Lankans will continue to laugh—and cry—at the absurdity of sending money out with ease while jumping through hoops to bring it in. A modern payment gateway for a modern Sri Lanka? It’s about time.
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by (2024-12-15 22:20:58)
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