2023-12-03 10:56:48
Could PayPal become a miracle solution for Tunisian e-commerce? This means of payment has been the subject of much discussion in recent months and it is true that this subject is becoming more and more topical, but it remains unclear for young Tunisian entrepreneurs. More information with Nizar Elbez, expert business development consultant. Interview.
For the uninitiated, can you tell us what the term PayPal means?
PayPal is a start-up founded by Elon Musk in 2001, following a merger between two computer security companies. This is a secure online payment solution. Young people prefer to use a PayPal account with a controlled limit rather than paying with a bank card and taking risks. This payment system was able to attract different countries around the world and find compromises with the majority of banks. It is true that as a means of payment, PayPal allows access to different markets, we can see a Japanese buying Tunisian olive oil online on an e-commerce site or see an American ordering Tunisian perfumes on a Tunisian application. All Tunisian entrepreneurs dream of a thriving market situation. Online transactions are generally instantaneous practically for the majority of countries. The management system is very ergonomic and really simplifies the work of a market place. If you are new to e-commerce, you will definitely find PayPal to be “the most reputable international payment solution” for your E-Commerce project. We therefore understand the controversy surrounding the subject and the dissatisfaction of start-ups. Currently, PayPal covers 200 regions and countries known for its unparalleled level of security. We must measure the difficulties of the Tunisian economic market and find parallel alternatives, we can cite Paymee which is a Tunisian payment solution present in different countries and which allows financial advantages all in a very ergonomic management system.
What are the main risks
you paypal?
We must realize that all this has a cost, PayPal is among the most expensive payment services in the world, on each transaction, a percentage of up to 3% is raised. Like any other means of transferring money, the exchange rate is really not advantageous. This is a fairly considerable spread that is taken on every transaction.
This payment system is not really suitable for VSEs and SMEs which do not have a lot of business volume, margin rates risk being impacted.
It looks a bit like an international marketplace which has been established in Tunisia for several years and which takes around 15% of the sales made. Small entrepreneurs are no longer there and will have to increase their prices to survive or abandon the marketplace, all to the detriment of a consumer who is already struggling with inflation. Aside from its sometimes high costs, PayPal represents a real threat to local payment methods. It is a solution that exists everywhere and in simplicity everyone would opt for a single solution and abandon existing Tunisian systems like Paymee or others under development which will have to be encouraged and sought to export. Far from the costs and competition with local means of payment, have we thought regarding the risks of fraud and money laundering in a country where 50% of its GDP is in the informal market and where only 37% adults have a bank account.
Before talking regarding international payment methods, we must assess the issues. It is time for us to see Tunisian patriotism in our purchases and to develop our local market. We are in the process of opening up to international markets which is quite good but we must prepare ourselves for competition from multinational companies, we must preserve the local economy above all. It is necessary to think of the small artisans, our neighbors, our friends, our neighborhood merchants. It is also obligatory to remember that the opening will be in both directions, you will see a young Tunisian buying shoes from an Italian retailer online or sneakers from a well-known French brand on the site “ Ali Baba”. We must keep in mind that the economic balance has been in poor condition for a very long time and that we have barely been able to stabilize it in recent months through very strict actions adopted by the State reluctantly. Negotiations are still ongoing between PayPal and the Tunisian state, it is essential to put in place adequate regulations to mitigate potential risks, such as fraud, money laundering, non-declaration of taxes, and parallel market. Close cooperation between PayPal, regulatory authorities and users is crucial to ensure that the benefits outweigh the potential challenges.
Can you give us an idea regarding payment methods?
Currently, the online commerce market is developing with double-digit growth since 2020. We note, however, that the number of e-commerce websites is not yet representative. We must not exceed 1,500 formal sites in 2021. The e-commerce market is currently monopolized by stores on social networks which lack transparency and which sell remotely rather than online. The customer is not opting for online payment at the moment due to lack of confidence.
The move to structured and recognized sites requires more effort from everyone, from the consumer who should prioritize declared companies that have an identifier to sell online with invoice and guarantee to the places of Facebook pages or Instagram profiles. Online sales companies must create more traffic on their websites and reflect more transparency for the origin of their products and services with better customer relations and real following-sales service.
The State must invest more in the control and monitoring of electronic commerce, but also in terms of popularizing procedures for this promising sector. The Tunisian is ready to pay online if he trusts it, he does it well with state institutions such as Sonede or Steg, the Ministry of Education and why not approved local companies. The banking system must capitalize on e-commerce in the coming years and increase its development. As a Tunisian, one must be aware of the preparations to be put in place before the introduction of PayPal. The State must find solutions that benefit our economy before partnering with PayPal.
It is important to note that economic conditions may evolve and challenges may be influenced by various factors, including global conditions, government policies and other economic dynamics. Finally, we must prepare multinational companies to declare their income to the Tunisian state and pay taxes such as social networks or PayPal soon. It is essential to remember that PayPal Europe is managed by its subsidiary in Luxembourg. Except that 91% of its transactions in the European market are transferred to its headquarters in Singapore to pay very little taxes in Europe.
What solutions are you considering?
There is not only PayPal as a payment solution for buying and selling on the Net. Banking solutions certainly exist, but need to be developed and improved.
Every Tunisian company has the right, today, to have an account in foreign currencies or convertible dinars. The entry of money in foreign currencies is controlled and also legal.
The technological card has made it possible to resolve certain problems for the purchase of services online, the ceiling is 1,000 dinars for ordinary citizens, this ceiling is 10,000 dinars for businesses and can further increase depending on needs. Foreign currency reserves are our guarantee of being able to buy basic necessities: wheat, medicines, etc. Each citizen is responsible for the capacity of our country to be autonomous and sovereign.
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