27 March 2017
PayPal, an online payment system owned by eBay that lets users pay online shops and other online services has been used around the world since 1998, is not yet permitted to operate in Tunisia. The issues surrounding PayPal have endured since 2015. At the time, it controversy mounted a campaign spearheaded by Tunisian developers to complain about blocking transactions through PayPal. Yet, the strategy adopted by the Tunisian government to protect the currency runs counter to the case of Morocco and Algeria, two neighboring countries that have no convertible currency too.
A nascent hope was kindled last September after the Central Bank of Tunisia (BCT) announced in a statement published on its official website that it has no objections for Tunisian users of PayPal to send and receive electronic funds in foreign currency, to and from accounts of other PayPal users, residing both in Tunisia and outside of Tunisia, and to withdraw funds thanks to the technology card or to an account in Tunisia. Indeed, the financial institution sent a letter of support to PayPal requesting Tunisia’s membership on September 27, 2016. Unfortunately, the application was not accepted because of certain legal restrictions on Tunisia’s currency legislation that seemed to block the process.
PayPal had requested the reformulation of the letter of support by the BCT accepting PayPal’s offer without any restriction, including the allowance to fund, through a PayPal account, a bank account opened abroad in the name of the participant. Even if the prerogatives conferred on the BCT in the area of foreign exchange allow it to ease certain foreign currency transfer procedures, approving PayPal's request and reformulating the letter was impossible. In fact, the current state of exchange regulations prohibited residents from the disposal of an international bank account, which is the reason behind the complexity of PayPal’s issue in Tunisia.
The request sent by PayPal to the BCT shed light on the loopholes that exist in the Tunisian legislative framework, particularly on Law No. 18 of 1976. This law orders all citizens to declare all of their assets abroad to the central bank. Residents must also repatriate currencies derived from the export of goods and services rendered abroad as well as all income or output originating from abroad and deliver them in the exchange market in accordance with the terms and conditions set by the BCT.
The only solution proposed by the BCT consisted of asking PayPal to provide in its system special conditions, including the repatriation in Tunisia of the collected funds in a PayPal account a proposition that demonstrated the unwillingness to change the Tunisian legislation and to give the opportunity to citizens to explore the free currency world.
Civil society deplored this unwillingness and went far by considering that the opening of PayPal can only be a political decision, which demands a lot of courage. Some Internet users mentioned that the heads of the BCT are aware of the stakes of missing such an opportunity but it is impossible for them to find a more effective solution under a largely outdated legislative system. Who is, in this case, responsible for updating the legislations?
It is evident that the ball is now in the court of policy-makers who have to make this issue a priority when revising the body of laws. End users in Tunisia have the right to use PayPal with or without a debit or credit card since it will be the key to solve some serious problems. A key point is that this service will enable them to receive money from investments they could make in Europe or in the U.S. Some others are in need for a prepaid debit card linked to an international bank account in order to make purchases online and to be able to pay their hotel bookings, online bookings, etc., as well as financing their children living and studying abroad.
This last example may seem like the reason for the government to maintain the same legislation and protect the Tunisian dinar, but why do we not see the extra currency flow such a change will bring? To put it more simply, PayPal is an incentive for developers, entrepreneurs, and e-commerce sites. By having PayPal as a payment option and proudly displaying this factor, their sales will increase.
At the very least, even if they do not want to slap a big banner on the front page of their website saying they accept PayPal, they can make it an option when it is time for the customer to pay. People need to be able to spend their money at these websites but Tunisian e-commerce sites are not benefiting from this money; instead, they are unfortunately losing many potential customers.
In sum, we need to emphasize the need for new legislation that meets the aim of citizens to open up to e-commerce and facilitate the use of virtual banks, especially PayPal. Such legislation is considered urgent since we are at the risk of missing out on the benefits such platforms afford.
Maryam Khribi, Tunis Business School (TBS)