PayPal is battling a growing chorus of opposition to its refusal to serve customers in the Palestinian territories, as British politicians join a US campaign group and hundreds of Palestinian nationals in calling for the payments service to lift its Palestinian blackout.
PayPal operates in 203 countries worldwide, but has never allowed Palestinian users to sign up with addresses located in Gaza or the West Bank, despite continued pressure from residents in the regions.
PayPal’s opponents argue that Palestine’s technology sector is being crippled by the decision to not roll out its services to Palestinians. PayPal claims that the Palestinian territories of the West Bank and Gaza simply do not meet the service’s regulatory requirements. The company told Motherboard in an email that there are no immediate plans to expand into the region.
In August, a US-based campaign group called Americans for a Vibrant Palestinian Economy (A4VPE) penned an open letter to PayPal CEO Daniel Schulman claiming that PayPal’s restrictions are a major limitation to the Palestinian technology sector. Adding salt to the wound, claims the campaign, is the fact that Israeli residents in the West Bank do have access to PayPal’s services, because PayPal works for Israeli bank customers, but customers cannot sign up with a Palestinian bank account. PayPal refused to elaborate on this following questions from Motherboard.
“PayPal’s absence is a major obstacle to the growth of Palestine’s tech sector and the overall economy. While other payment portals are available, there is no replacement for the trust and familiarity that PayPal inspires among potential users, particularly those that are unfamiliar with Palestine-based companies,” the group wrote. “Without access to PayPal, Palestinian entrepreneurs, nonprofits, and others face routine difficulties in receiving payments for business and charitable purposes.”
This letter was backed by a social media campaign that has boomed in the last few weeks using the hashtag #PayPal4Palestine, which has prompted many Palestinians to speak out about their frustrations with PayPal.
Palestinian nationals have described to Motherboard how PayPal’s decision is bad news for the technology sector.
“Without PayPal, startups lose money and customers,”said Mohammed Qasem, CEO of Gaza-based humor website 5qhqh.com. “One of the main revenue sources for startups is purchases on websites and apps and it is extremely important to ensure that potential customers have payment options that they trust and are comfortable using.”
Qasem, like others who spoke to Motherboard for this story, asserted that using lesser-known payment services isn’t good for business.
“Other payment services are less well known in the MENA [Middle East and North Africa] region and potential customers dealing with a new, unknown Palestinian website or product are more comfortable sharing their credit card or bank information through a trusted payment platform,” he said. “PayPal is also much less expensive and more flexible than other alternatives as users can pay with a debit card, credit card, or bank account or add funds from a MoneyPak [prepaid Visa card].”
Khaled Abu Al Kheir, CEO of gaming startup Pinchpoint, told Motherboard, “The level of trust customers have in PayPal is significantly higher than other payment options, they know that all their credit card info is stored on PayPal and the seller only get the payment and can’t store any info for future use, but for example with [payment platform] Stripe, the customer has to enter the info in a widget in the seller site which feels less secure and more visible to the seller.”
PayPal’s decision has even caught the attention of British politicians, with more than 40 British MPs signing an “early day motion” last week urging the global payments service to lift its restrictions on users in the region.
Some believe that the decision to not enter the Palestinian market may be down to political reasons
While an early day motion may not necessarily reach a debate in the House of Commons in the UK, the submission shows at least some awareness on a political scale of PayPal’s decision in Palestine.
PayPal told Motherboard, “We appreciate the interest that the Palestinian community has shown in PayPal. While we do not have anything to announce for the immediate future, we continuously work to develop strategic partnerships, address business feasibility, regulatory, and compliance needs and requirements, and acquire the necessary local authority permissions for new market entries.”
However, some believe that the decision to not enter the Palestinian market may be down to political reasons.
One source, who works closely with the A4VPE campaign, suggested to Motherboard that PayPal’s employment of ex-Israeli Defence Forces (IDF) intelligence officers may be contributing to the blackout. Israeli newspaper Haaretz detailed in 2014 how PayPal’s top anti-fraud team consists of “mostly veterans of the Israel Defense Forces’ intelligence corps.”
Motherboard was told that these employees “may be opposed to [PayPal’s Palestinian expansion] for reasons that have little to do with business interests.”
PayPal did not comment on whether employment of ex-IDF analysts is contributing to the issue. It is well know that many of Israel’s top cybersecurity companies hire from the intelligence pool of the IDF, and many US companies employ cybersecurity companies run by ex-IDF analysts as they are considered among the best.
But the situation remains an almost anomalous one, especially among US multinational companies. Technology firms such as Cisco, HP, Google, and Intel are all present in Palestine, with the US State Department even having lobbied for IT firms to enter the region in a 2010 initiative.
Either way, Palestinians are eager to work around any issues and get PayPal opened up in Palestine.
"I prefer not to overly speculate on PayPal's hesitation on entering the Palestinian market, basically because I feel that when they look at the facts of the situation they will find no sound reason why they do not provide their services to the Palestinian market,” Sam Bahour, one of the founders of the A4VPE campaign, told Motherboard.
“We went public when they did not reply, after multiple attempts to contact them directly, but that does not mean that we are not ready to roll up our sleeves and make this happen, together."