First National Bank (FNB) has unlocked withdrawal restrictions on its e-commerce service, FNB PayPal, so that South Africans can now withdraw funds from a PayPal account to transfer to any South African bank account.
The move was announced yesterday and means that all South Africans who hold a bank account can receive funds from PayPal's more than 100 million active users, whereas this option was previously exclusive to FNB customers.
This comes 18 months after the unveiling of FNB's Top Up and Withdraw PayPal services.
Chris Savides, FNB's GM for complementary online services, says the PayPal service has seen significant uptake since its launch in March last year. However, over time FNB realised that “for some businesses having to open a new bank account is not always practical. So we decided to allow non-FNB customers to also use the withdraw service by linking their non-FNB bank account to an FNB online banking profile and then to their PayPal account,” he explains.
He says the move is a step in the right direction for e-commerce and entrepreneurship in SA.
“Over 20 000 FNB banked merchants and individuals have already signed up for the PayPal service to date. By opening up the [withdrawal service] for individuals and businesses that do not bank with FNB, it is able to offer the more than 500 000 South Africans with registered PayPal accounts the ability to receive funds through PayPal into their selected bank accounts.”
Savides says that, while most registered PayPal users utilise their accounts to buy goods and services from overseas merchants, “there are several merchants and entrepreneurs who could be using PayPal to grow their business globally”.
Prior to yesterday's announcement of open PayPal withdrawals, South Africans making use of PayPal, but not banking with FNB, were able to make credit card-based payment transactions and transact online with PayPal by linking their credit card to an authorised PayPal account.
“The new PayPal withdraw service for non-FNB customers is similar to the current service whereby users are required to link their verified South African PayPal account to a South African bank account,” explains Savides.
He says customers who want to use the PayPal service to receive funds into their nominated bank account are still required to create a free FNB online banking profile in order to link the accounts, even if they do not bank with FNB. “It facilitates the Know Your Customer and reporting requirements of the South African Reserve Bank and ensures that all transactions take place within the exchange controls.”
The new PayPal option applies to withdrawals only and individuals who want to execute person-to-person payments will still have to have an FNB account linked to PayPal.
Customers can open a PayPal account by visiting www.paypal.com/za and linking it to a qualified South African bank account by visiting www.fnb.co.za. “They will be able to receive payments in 24 different currencies via PayPal, and FNB will convert the currency to South African rand when the money is withdrawn into their South African bank accounts.”
Registration is a once-off, free process.
Internet influence
Savides adds that the Internet has changed the global commerce landscape and says he encourages South Africans to think about selling their goods and services to people outside of SA's borders. "Anyone has the ability to become a global online retailer. There is a diversity of businesses and individuals receiving payments with PayPal, from taxidermists to tour operators, philanthropists to philately.”
He says South African online floral and gifting retailer, NetFlorist.co.za, started making use of PayPal after realising that 30% of its business came from beyond our country's borders.
Head of PayPal's business in Israel and SA, Oded Zehavi, says FNB and PayPal have a similar focus when it comes to the improvement of payment services and the use of available technology, so the affiliation between the two entities makes sense.
“With SA's solid financial infrastructure and its status as one of the continent's largest economies, we have seen great strides in e-commerce in this market. FNB and PayPal's initial offering will be further bolstered [by the opening up of the withdraw service from PayPal].”
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