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Why Paypal features in Africa are limited
September 29th, 2007 · 9 Comments
A few years ago, there was no single country on the African continent where one could send/receive money online via Paypal. Not one. Then there was South Africa. A few countries were added, as most were later covered. Even now, all the African countries can only send - they cannot receive money via Paypal.

Any enquiry to Paypal on these issues always come with the same answer:

PayPal is constantly working to expand and improve our services for our customers. We hope to be expanding our availability to include more countries, however, due to the complexities of global expansion, we cannot give a timetable for this.

Just recently, Paypal announced that some more countries can now withdraw their Paypal funds to a Visa or Mastercard credit, debit or prepaid card. Still, no African country is among the 26 that have these added functionality.

It is indeed interesting to note that Paypal is not available to residents of Nigeria which is Africa’s 2nd largest economy after South Africa  and also the most populous nation in Africa. The potential is there. Indeed, many banks in Nigeria now issue international Mastercard credit cards and local debit cards are also widely used at ATMs, on the Internet and at Point-Of-Sale (POS) terminals.
I am speculating on some reasons why residents of some African countries cannot use Paypal while others have just limited use:

1. Banking system: the banking system in some African countries are not entirely electronic though many countries are fast developing in this area. Countries like South Africa, Egypt, Nigeria have gone far. Their banking system are quite developed.

2. Governments policy about the influx or rather out flux of foreign currency like Euro, British Pounds sterling and the US Dollar. Fear of the economic concept “Capital Flight” has made many African governments maintain a strict control on the outflow of foreign exchange from their respective countries.

3. High level of potential fraud: This would relate more to Nigeria, Egypt, Ghana. The incidence of fraud reported from these countries are high indeed and many online merchants and fraud-screening databases have marked these countries red. Legit businesses are thus negatively affected. Very few online merchants or mail forwarding agencies would ship to these countries.