Why PayPal refused Ukraine
PayPal underestimates the potential of Ukraine, it is guided rather by emotional considerations
Read the original text at Novoye Vremya.
Negotiations between the largest online payment systems in the world and Ukraine’s National Bank ended with no success - PayPal refused to extend the list of available services in our country.
Yesterday in Warsaw, PayPal representatives met the representatives of National Bank of Ukraine (NBU). The sides discussed expansion of functionality for our fellow PayPal, but the talks ended in rejection.
According to one of the participants, IT entrepreneur Illya Kenigshtein, Ukrainian side prepared very well, but it was not enough. Deputy Chairman of NBU Vladyslav Rashkovan has reasonably stated the position of the state, but PayPal has officially rejected the expansion of services available to Ukrainians.
PayPal has provided Ukrainians only with an opportunity to spend, but they cannot accept payment for sold goods. According to Illya Kenigshtein, managers of this payment system had just to change a few settings, in order Ukrainians were able to obtain consent from them. Therefore, our small businesses that manufacture clothing, furniture or something else are not able to easily and simply accept payment for goods sold abroad. "You cannot sell it all on Etsy, Amazon or eBay, because you live in North Korea," said Illya Kenigshtein.
At the PayPal website you can find exciting stories of small businesses on how thanks to this payment system they went into the international arena. Experts have said that the availability of simple and modern tools for cross-border e-commerce is able to stimulate the development of small and medium businesses.
In Europe, the positive effect on the development of online payment in GDP researchers estimated at over 100 billion EUR, or more than 1% of GDP of all 27 EU countries. According to one of analysts, Ukraine would perceive a smaller effect in absolute terms but, given the relatively low level of development, it would amount to a higher percentage of GDP. By some estimates, remittances in Ukraine are $ 5.10 billion annually and recently have partly passed in shadow. "It reduces cost and increases security for users," said the expert.
Illya Kenigshtein cited three reasons that prevent full exit of PayPal in Ukraine:
1. PayPal sees Ukraine as a business case. The leadership of the American company underestimates the potential of Ukraine, it is guided rather by emotional considerations.
2. The economic instability in the country.
3. Legislation - despite some progress, the regulatory framework of Ukraine is still very problematic for companies like PayPal. "NBU is trying to control everything that is possible," emphasized Illya Kenigshtein.
He noted that the ministries, the National Bank and other state agencies, which are interested in economic development, should be more focused on large innovative companies. "We have to run for IKEA, for Google, for Apple, and other companies, otherwise they will not have emotional reasons to come to our country. We have no trumps on hands," said Kenigshtein. He refrained from speculation when will be the next interaction with PayPal, saying that the meeting should be dedicated to "debriefing" and accomplishing "homework".
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