PayPal launched in the Middle East in 2012 with great expectations of bringing their unique brand of payments innovation to the ever growing community of Arab potential users.
Two years later, things have not exactly gone as planned, PayPal has just 500,000 active customers in the region and market share remains at about 5 percent. Planned offices for Dubai never came to fruition and so the company’s staff for the region is located in Paris instead of on the ground.
Yet, PayPal says it remains committed to growing its Middle Eastern business, as the company says that its faith in the region’s potential for growth remains unshaken.
PayPal forecasts online spending in the Arab world will grow to $15 billion from $9 billion when they first entered the market two years ago. PayPal is not alone in making this regional bet J.P. Morgan Chase & Co., Tiger Global Management LLC and Summit Partners all recently buying into e-commerce in the Middle East.
The main difficulty in the region remains a cultural commitment to using cash as the primary form of payment. PayPal has also face difficulties with not offering transactions in local currencies, lacking an Arab language service and an inability to communicate directly with local banks. These are problems the company is focused on rectifying moving forward reports The Wall Street Journal.
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