State-owned Sonali Bank has signed a memorandum of understanding (MoU) with PayPal, a global online payment system, to facilitate remittance inflow in Bangladesh.
The MoU was signed with an aim to promote e-commerce in Bangladesh, said Dider Md Abdur Rob, acting managing director of Sonali Bank.
He said: “We signed the MoU a month ago and sent it to PayPal. On Wednesday, a local representative of PayPal informed us that the US-based company has signed the deed.”
Zunaid Ahmed Palak, state minister for ICT, held an emergency meeting with Sonali Bank over the progress of the MoU signing as Bangladesh had been trying to set a contract with PayPal for a long time, said Dider.
Bangladesh has been facing difficulty in receiving remittance earned through outsourcing but the new contract with PayPal will make the remittance inflow easier and faster, he added.
PayPal allows individuals and businesses to transfer funds electronically. As it is an online service, an individual first needs to open a PayPal account with a valid email address. The aspiring PayPal user would also need a valid credit card or a bank account linked with PayPal to avail its services.
PayPal makes money by charging transaction fees mainly from business accounts, charging to a payment’s recipient. Although most transactions are free, merchants pay a fee for each transaction. The fee is usually thirty cents plus a 1.9% to 2.9% surcharge fee, depending on the special surcharge formula they use.
However, there is no fees to send money.
On July 15 last year, Zunaid Ahmed Palak in a Facebook status said: “We had a very effective meeting with the vice-president of PayPal today in San Jose, California. We explained them in details about Bangladesh Government's policies and regulatory reforms and business opportunities for PayPal.
“They have agreed to launch Xoom's operations in Bangladesh within this quarter. They [PayPal] will also internally discuss on how they can prioritise and launch PayPal in Bangladesh and let us know if they need any further support from our government. We will continue our persuasion to bring PayPal in Bangladesh sooner than later.”
In July 2015, PayPal acquired Xoom to expand its business in emerging markets like China, India and Mexico.
After the meeting with Palak, PayPal said that they would decide about their operating in Bangladesh after performing an internal evaluation and assessment of the business potential, sources in the ICT sector said.