PayPal is one of the leading payment solutions around the world, available in over 200 countries in 25 currencies to choose from. PayPal is used to send and/or receive money remotely, or as a payment channel on over 19 billion websites, according to its website. Boasting high levels of security, it also gives users the option to retract payments with the single press of a button.
So why on earth is Lebanon one of the rare exceptions where PayPal is not accessible?
PayPal officially prohibits 14 countries from using its services, including Syria, North Korea and Iraq. “In most cases, the processing bank will decline transactions that originate from these countries,” says PayPal.com, that goes on to explain that the decision is based on regulations and governing bodies. However, this list doesn’t mention Lebanon, so what’s stopping its implementation? That we know of, not much and a lot.
Several Lebanese banks already offer online payment protections and services, such as Credit Libanais’ 3D 2-Factor Authentication (2FA) and Bank Audi’s various payment options (NFC, Contactless Payment and others). Clearly, it isn’t a regulatory issue but still, no one seems to know the reason behind the PayPal Lebanese blockade – and a simple Google Search will not give you a single clear explanation.
Not a priority
In 2013, Elias Ghanem, general manager of PayPal Middle East, announced launch plans for the service in Egypt and Lebanon at the ArabNet Summit. Ghanem told a trio of bloggers that “As opposed to the popular belief that the problem is all about the restrictions imposed on Lebanese credit cards, […] the company follows a roadmap. [It] unrolls its service gradually in different countries according to priority level. The GM confirmed that there is no legal restriction on Lebanon and the only problem is the market not witnessing an important rate of online payment.”
However, by end-2013 and with no PayPal in sight, the community continued to ask about the service – or rather lack thereof. The answer given to The JRExpress blog by Laurent Wakim, then business manager of PayPal MENA, was sadly clear:
Some may agree that for 2-3 years, the “not a priority” answer could be acceptable. But it’s been six years and the only answer we’re now getting from PayPal is: “Not available” (thank you, Captain Obvious).
This all leaves us with mere speculations… A user by the name Shitij Nigam on forum Quora.com made an educated guess: “Lack of market potential, driven by an average-sized population (4.5mn), moderate internet penetration (~50%), Social and/or cultural factors, i.e. preference for purchasing goods at local stores, Lack of trust in online payments, environmental factors (Regulatory, Banking, Market), and banking fees upwards of 9% for credit/debit cards.”
Another one by the name of Nikunj suggests that banks may not be cooperative, while PayPal needs a partner to function, and agrees that the country might not be a lucrative enough opportunity.
Services that circumvent PayPal’s terms, such as PayPalLebanon.net, do exist. However, they usually involve a fee (around $30) and ask you to share your banking or identification documents. More importantly, they are illegal, and people using them could potentially get their official PayPal accounts banned. For example, a year ago, EntroPay, a Saudi fin-tech entity, allowed users to create virtual credit cards and add them to their PayPal accounts. Eventually, circumventing PayPal’s terms of service by having users pretend they live in Saudi Arabia, only led the company to soon dissolve this service – and it’s now facing closure for unstated reasons.
So here we are, with no free and secure solution or alternative to the PayPal issue in Lebanon, and nothing seems to indicate progress any time soon.