It is nearly impossible for businesses in some African countries to receive money from PayPal. While the payments giant has not given reasons why this is so, speculation hints at factors like insufficient regulation and poor banking security in said countries.
That might be a thing of the past for some businesses as African payments company Flutterwave announced a collaboration with PayPal to allow PayPal customers globally to pay African merchants through its ‘Pay with PayPal’ feature on March 16, 2021.
Via this partnership, African businesses can connect with the more than 377 million PayPal accounts globally and overcome the challenges presented by the highly fragmented and complex payment and banking infrastructure on the continent.
According to CEO Olugbenga ‘GB’ Agboola, this will happen via a Flutterwave integration with PayPal so merchants can add PayPal as a payment option when receiving money outside the continent. The service, which is already available for merchants with registered business accounts on Flutterwave, will be operational across 50 African countries and worldwide, the company claims. Flutterwave hopes to roll out this service to individual merchants on the platform as well.
“In a nutshell, we’re bringing more than 300 million PayPal users to African businesses so they can accept payments across the continent,” he said to TechCrunch. “Our mission at the company has always been to simplify payments for endless possibilities, and from when we started, it has always been about global payments. So despite having the largest payment infrastructure in Africa, we want to have arguably all the important payments systems in the world on our platform.”
Since PayPal’s expansion to Africa, it has maintained a one-sided relationship with most countries on the continent, allowing them only to send money. And according to its website, only 12 African countries can send and receive money on the platform, but to varying degrees. They include Algeria, Botswana, Egypt, Kenya, Lesotho, Malawi, Mauritius, Morocco, Mozambique, Senegal, Seychelles and South Africa.
Users in countries who are not afforded the luxury to do so have to rely on using the PayPal account of a friend or family, based in countries where payments can be received. Next, they request the funds via bank transfer, leading to more incurred costs or use other cross-border money platforms like WorldRemit. This is a pain point for these businesses, particularly in Nigeria.
This collaboration is a step forward in the right direction for Flutterwave, which has shown time and time again the length it is willing to go for its 290,000 merchants and the ongoing quest to become a global payments company.
“By working with PayPal, we can further strengthen our commitment to our customers and service users as we will be enabling them to transact and expand their business operations to reach new markets. PayPal’s global reach is unrivalled, and collaborating with them allows our customers to explore new markets where PayPal is embedded,” the CEO said.
