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PayPal Holdings Struggles to Comply with New Thai Regulations

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PayPal Holdings Struggles to Comply with New Thai Regulations

PayPal Holdings the world’s largest online payment service will suspend most of its services for consumers, freelancers and sole proprietors in Thailand on March 7th, in order to comply with Thai regulations.

Consequently, industry experts believe the move would let other competitors step in amid strong competition in the segment, resulting in the loss of customers for PayPal.

A PayPal spokesperson said, “We have opened registration for registered businesses and we are in the process of transferring existing business customers to PayPal Thailand.”

In order to conform to all Thai laws, we need more time to finalize our services for consumers, sole proprietors, and freelancers or casual sellers.

Customers in Thailand with existing PayPal accounts will no longer be able to use their PayPal wallet to shop online starting March 7, according to PayPal’s website. They will be able to withdraw money from their PayPal wallets to their bank accounts.

Merchants that offer Guest Checkout will still be able to accept debit and credit cards from consumers.

According to PayPal Holdings, freelancers, casual sellers and sole proprietors in Thailand will also have limited functionality starting March 7. Consumers, freelancers, and sole proprietors will not be able to register for new accounts until further notice.

PayPal Holdings is still accepting registrations from Thai businesses

Business accounts that have already been created must accept the revised PayPal Thailand Relaunch Agreements and verify their identity by February 18, otherwise, their PayPal business accounts will be restricted from March 7, including the inability to send, spend or receive funds.

The PayPal team has been working hard to relaunch in Thailand for months.

Furthermore, according to PayPal Holdings media statement, “As a Thai-licensed payment provider, we are gradually updating our products and processes to ensure compliance with all Thai laws.”

PayPal Thailand has already opened account registration to registered businesses, and we had hoped to welcome more customers in the next phase of our relaunch this March.

However, we need more time to prepare our services in Thailand to reach this next phase and to build the best possible platform for our customers in Thailand. This means that PayPal Thailand services will only be available to registered businesses for the time being.”

Piyachart Ratanaprasartporn, chief executive of 2C2P Thailand, a Southeast Asian payment service provider, said PayPal is not very popular in Thailand because there are high fees attached to it.

In Thailand, e-wallet providers offer more discounts to attract customers to their services, he said. PayPal’s move is likely to result in customers leaving the platform, he said.

Affordable international remittance options

Ascend Money CEO Monsinee Nakapanant says PayPal’s move will affect consumers, online sellers, and freelancers who conduct cross-border transactions to and from Western markets.

Consumers in Thailand have other options as well, such as TrueMoney Wecard, which allows them to pay international merchants without the use of credit or debit cards.

The PayPal Holdings move could “open up the possibility for mobile operators to fulfill the needs of Thai merchants and freelancers who receive international payments, as there are no other affordable international remittance options currently available,” she said.

According to Pawoot Pongvitayapanu, an e-commerce expert, the move will impact freelancers and online workers who receive their work payment through PayPal.

There are still other services available in Thailand that can be used in lieu of PayPal.

The company may find it difficult to deal with the identification verification of customers as well as other legal requirements, so it made such a move, said Mr. Pawoot.

PayPal Holdings could offer new services

Michael Araneta, head of advisory and research at IDC Financial Insights, told the Bangkok Post that the Thai payments market is rapidly evolving, and PayPal’s inability to rework its strategy for the market will result in it losing a lot of market share.

From 2019 to 2025, Thailand’s mobile wallet market share is expected to grow by 5%, while cards and domestic real-time payments will grow by only 3% in the market share each, taking market share from cash-based payments,” Mr. Araneta said.

Brands associated with local digital services ecosystems (Line, AIS, True, Grab) are likely to continue to gain share.

In addition, these players may gain cross-border and international usage – which has always been a strength of PayPal – as well as in more everyday use cases for Thai consumers, he said.

In Thailand, real-time payments (domestic real-time payments, facilitated by QR codes and direct transfers) will continue to rise. Throughout Thailand, real-time payments (domestic real-time payments through PromptPay) will continue to be facilitated by QR codes, he said.

Perhaps when PayPal Holdings succeeds in its rework for the Thai market, things will also change,” said Mr. Araneta.

According to Suthikorn Kingkaew, a project leader at the Thammasat University Research and Consultancy Institute, PayPal would like to comply with Thai regulations, especially e-taxation.

Taking away most services from non-registered businesses would result in PayPal losing some of its customers, he said.

By complying with local regulations, PayPal could offer new services and draw new customers, particularly in the banking and lending fields, he explained.

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