A new report from the State Bank of Pakistan says a lack of electronic payment services like PayPal in the country has led the nation to lose out on as much as $2 billion in payments related to the information and communication technology sector.
Reports in the Express Tribune on Wednesday (Feb. 6) said the central bank’s report has pointed to PayPal’s absence for the reason why the country has missed out on as much as $2 billion in payments related to information and communication technology (ICT) payments. The State Bank of Pakistan published its State of Pakistan Economy Report for the first quarter of Fiscal Year 2018, pegging ICT exports at $1 billion for 2018.
But the true value could be as high as $2.5 billion, the report said, with some IT experts valuing the market even higher, at $3 billion.
The central bank said small- and medium-sized business exports in the ICT industry made up $1 billion of the value, with the remaining $500 million attributed to freelancer payments for workers that service clients across borders. Without PayPal or other electronic payment services, customers using Pakistan-based ICT services cannot pay for them digitally.
“The absence of PayPal is a major concern,” the report stated. “Foreign employers generally make their transactions through PayPal.”
The report also pointed to the lack of documented transactions as a growing concern for the Pakistan economy.
“Anecdotal evidence also suggests that some firms and individuals themselves bypass proper documentation in order to either stay out of the radar of tax authorities or avoid the hassle of filling out SBP’s Form ‘R’ (considered both cumbersome and redundant),” the central bank wrote. “Furthermore, most firms simply opt out of negligence and lack awareness about the proper export procedures.”
The report concluded that proper documentation of that additional $1.5 billion either lost or obscured due to a lack of services like PayPal could support the national economy and release Pakistan from pressure on its foreign currency reserves. The issue also prevents an increase in ICT exports for the country, the SBP said.