What is PayPal?
Those who have never needed to transfer money online will be unfamiliar with the pain and frustration of trying to do it in South Africa. PayPal is the world’s leading online money transfer service. It’s simple, easy and cheap. All you do is put money into your account using a credit card or electronic transfer, and you can send it to anyone with a few clicks, or use it to buy just about anything online.
So What’s the Problem?
The problem, until now, has been that South Africa has exchange control regulations (among other regulatory issues). These are an archaic set of laws that most countries haven’t had for decades, if ever. They were designed to stop people plowing tons of money out of the country because they were scared of Die Swart Gevaar, communists or Julius Malema. This means that we were unable to receive payments via PayPal – a major problem for anyone with an online business in SA. We had to use other, less popular services like Moneybookers.
Why the Change?
First National Bank (FNB) realised that there was a major gap here, and stepped up to the plate to fill it. I can’t even imagine the high-level negotiations this must have taken with the Reserve Bank and government, but it worked. We can now receive PayPal funds. Well done guys. You can see a video of them briefly explaining (and promoting it) below:
Big Deal – I’m Not a Merchant!
Ok, so you’re not trying to make your fortunes online – doesn’t mean you can’t benefit. For example, you can now sell stuff on eBay easily, or get rid of unwanted festival tickets, etc. You can get birthday money from Gamma in New Zealand, or hide money from the taxman.
For those who are merchants, this means a HUGE boost to eCommerce in South Africa – something that has been a long time in coming. It means online businesses will get better and better, and we will finally be able to buy things online with the same ease that you can do it overseas.
The Big, Hairy But
There are still a few restrictions, and you can check out a good explanation of all of this on The Daily Maverick if you want to read the nitty-gritty. However, my major concern is that FNB will be charging a fee of 1.5% on all transactions.
The implications of this are MASSIVE. Buy FNB shares, right now. What this means is that PayPal is now just as expensive as Moneybookers, however. Don’t get me wrong – I love FNB. They’re my bank, because I’ve tried all the rest and found them wanting. Good on them for getting this right, and making a fat pile of cash out of it (hopefully).
So if you don’t have one yet, go on and sign up for a PayPal account, and just see what you can do with it. I’ve had one for years and pretty much never been able to use it, but I’m very excited for that will be possible from now on.
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