Technological Revolution also known as “fourth industrial revolution” is going to transform everything humankind has ever experienced. During last two decades, the rise of information technology across the globe has played a vital role in digitizing the world. High-speed mobile Internet, AI and automation, the use of big data analytics, and cloud technology are the key determinants of this new paradigm leading towards the internet of things, genetic engineering, robotics and other technologies. Many arenas have been opened for developing countries like Pakistan. For example by introducing new platforms for growth and digitalization which help reducing effort, energy and time ultimately minimizing workloads. During Covid-19 dependence shifted on digital world hugely.
As a result, IT is the fastest growing sector contributing 1% of GDP i.e. about 3.5 billion USD in Pakistan. It has been doubled during the last 4 years and expected it to grow at the same pace with a $7 billion turnover annually. Pakistan is among the top five fastest growing IT markets in the world. Freelance market in Pakistan is growing rapidly with huge potential to support the economy of Pakistan in better ways. In near future it is expected that freelance industry and SME’s will become a major pillar for economy because it is integral part of IT industry. The Covid-19 pandemic has left approximately 20.6 million Pakistanis jobless. Many have adopted online platforms for earning livelihood. In a poverty-ridden country, people will have no option but to try to make it in the online business. Therefore, PayPal will become extremely important in the future.
Unfortunately previous governments and this government of PTI have not realized the importance of IT industry. Because bigger the scope bigger will be needs to cater the industry. Recently Pakistan has been added to the sellers’ list of the world’s greatest e-commerce platform: Amazon. Pakistani traders can export their products all over the world through Amazon now. However Pakistan has not PayPal services available which is the most trusted and secure method of online payment. PayPal is a universal financial technology company that allows its users to easily exchange money online. The company is fully functional in more than 202 countries and almost 300 million active users worldwide, and it operates in 25 currencies. With arrival of Amazon, the freelancer community in Pakistan is demanding the establishment of PayPal also. It is quite annoying that the PayPal service is available in many underdeveloped countries than Pakistan. Currently, there are over 3.3 million registered small and medium-sized enterprises (SMEs) and freelance working in Pakistan, which is far bigger number than Bangladesh – a country where PayPal has been providing services since 2017.
In Pakistan, 65 to 70 percent population lives in rural areas with very few opportunities in IT, yet they do not hesitate in grabbing whatever is coming their way. Hence big chunk of rural population is vastly becoming freelancers with their quality skill-set. Pakistani freelancers are trusted all over the world because of their skills, commitment and trust. Top of all Pakistani freelancers are preferred because they do not demand high wages. However they face enormous difficulties too.
There has been concerns by freelancers that Government does not provide incentives to do business. The biggest hurdle faced by businesses is a Payment gateway. Unfortunately, chronic issues has barred IT industry(rural or urban) to benefit from global e commerce platforms like Pay Pal compelling them to opt for alternates. Pakistani freelancers cannot accept payments from clients through most trusted method of PayPal rather they have to use freelancing platforms like (Freelancer, Fiverr, Upwork). Unfortunately it impacts the clientage negatively as they demand money transfer though PayPal, which is not available.
In 2005 first request was made by Government of Pakistan for PayPal operations in Pakistan however it was refused because Pakistani authorities were unable to fulfil the demands of PayPal regarding the banking system. PayPal mechanism requires overdraft and the banking system of Pakistan does not support. Some relevant laws regarding cybercrime are also missing which leave PayPal reluctant to provide services in Pakistan.
In order to bring these services in Pakistan it is suggested that
- The State Bank of Pakistan (SBP) should reduce its licensing fee for PayPal, which is $2 million.
- Local and Foreign companies should be given incentives to work in Pakistan.
- Moreover Investment-friendly policies must be devised to attract foreign investors like PayPal.
- Reforms and upgradation of cybercrime regulation is prerequisite for foreign investors.
IT professionals have time and again reiterated the importance of PayPal service in Pakistan and requested Government of Pakistan to help them. Despite allocating budget for Information Technology, adequate efforts have not been done to remove these hurdles. In upcoming FATF planery Pakistan is unlikely to come out of grey list. Which will again restrict PayPal service to come in Pakistan. Moreover reservations for which Pakistan government is unable to negotiate includes license fee, money laundering and unsupportive banking system and cybersecurity assurances. Unfortunately Pakistanis prefer cash payments contrary to western countries where economy is digitalized and shifting majorly on blockchains now.
Freelancers and IT professionals use alternative Payment gateway is known as Payoneer however this is not supported by all the clients and countries. Keeping all the options in mind and the probability of how much IT industry can contribute to the economy of Pakistan, Government should seriously think of dealing with PayPal authorities.