PayPal is the global market leader in the online payment industry. It is one of the most preferred, easiest and largest online payment processors in the world.
PayPal’s entire business model is based on facilitating secure transactions while offering a massive number of features. But the global service provider Paypal is not yet in direct use in Nepal.
What are the Paypal regulations in Nepal?
The central bank of Nepal (Nepal Rastra Bank) restricts any Nepalese citizen without a foreign visa to obtain an international credit or debit card and when banks do not materialize international transactions, one cannot receive funds on their PayPal based in Nepal, having this in account that PayPal is unsuitable for use in our country.
There is a legal way by which one can verify their PayPal account in Nepal, but this process has some limitations. One cannot link their Nepalese bank accounts, instead they will need to have a bank account in the country where PayPal can be accessed.
This is the reason why many people are forced to use the accounts of their friends or relatives to transact online through PayPal. To verify a PayPal account, one must have a verified US/UK bank account or it can be validated through that of a friend or family member residing there.
But why doesn’t the government allow the direct use of Paypal?
The ICIJ (International Consortium of Investigative Journalists) has revealed the FinCEN files tilted by FinCEN (Financial Crimes Enforcement Network), which is an office of the United States Department of the Treasury that collects and analyzes information on financial transactions, international money laundering and others.
Financial crime has indicated how Nepalese banks and companies have been involved in the transaction of a huge amount of money acquired in a suspicious way. They have also mentioned how various companies and individuals have carried out suspicious capital transactions related to cross-border trade.
In the past, it was also discovered how many people are operating in the marketing and distribution of unauthorized digital payment cards in the market.
When banned cards like this are used for criminal purposes, they tend to create suspicion, and since one of PayPal’s main functions is how little it shows about the merchants involved in the transaction process, it’s hard for Nepal to consider the prospect of PayPal and since this quirk is not backed by Nepal Rastra Bank PayPal is incompetent in Nepal.
Although PayPal has a reputation for safety and security, including strong policies and procedures for detecting and reporting suspicious activity, there are times when fraud and criminal activity is committed through the consumer rather than PayPal.
There are many actionable steps merchants can take to avoid scams and fraud, but despite all precautions, there are scams and fraud that take place via phishing email, fake email, transaction laundering where scammers can find vulnerabilities in people’s online activities and exploit them against their weaknesses.
PayPal Alternatives in Nepal
Payoneer – This is another popular alternative to PayPal. It is an international MasterCard. To apply for this international credit card in Nepal, you will need to register with Payoneer, submit documents (passport) to validate your identity and wait until the card is sent to your address and verify it online.
It would be efficient and beneficial if PayPal were allowed and used throughout the country. This would make international payments and transactions easier and would surely improve the lives of Nepali citizens.
