PayPal - A Chance for Georgian Business or an Illusion?
24 April, 2015
PayPal - A Chance for Georgian Business or an Illusion?
PayPal, one of the leading global payment providers, has recently announced plans to allow businesses in Georgia to accept payments via its system, starting April 14th. However, the official website of PayPal still lists Georgia among the countries ineligible for this feature. This raises quite a few concerns – after all, uncertainty is a bane to business.

On April 14th, PayPal became available in full, to individuals and business alike. This opens up a big opportunity for Georgian business, PayPal
believes. Sellers can now be less wary about accepting payments from buyers in new markets, since all money transfers are authorized by PayPal.


The Georgian public happily welcomed the entrance of PayPal in Georgia two years ago. There even was a Facebook campaign in 2010 called, “I need PayPal in Georgia” that gathered nearly 20,000 supporters. The Georgian government boasted that it was not easy to get Georgia on the PayPal’s user list, but thanks to the efforts of the National Bank and the Ministry of Economy this service became available in the country nevertheless.
Initially, the PayPal service was available only to individuals, and the feature of accepting payments was closed. However, on April 14th, PayPal became available in full, to individuals and business alike. This opens up a big opportunity for Georgian business, PayPal believes. Sellers can now be less wary about accepting payments from buyers in new markets, since all money transfers are authorized by PayPal.
Paata Sheshelidze, President of New Economic School, agrees that PayPal represents a big opportunity for the Georgian business. He expects PayPal to increase competition and reduce the price of money transfers in the Georgian market, where banks dominate this field.
Zurab Gvasalia, Chairperson of the Association of Georgian Banks, agrees with the notion of PayPal offering new prospects to Georgian business, especially to the small ones that have no access to the overseas markets. However, he thinks that PayPal is a partner rather than a competitor to banks.geotv.ge
“PayPal payments are tied with banking accounts. It has no other way to conduct money transfers. So the service may reach those people in the regions—I mean individual entrepreneurs—who still have no bank accounts. Banks do not worry too much about securing small businesses as long as they are interested in registering on PayPal in order to sell their product. To do that, they have to open bank accounts. So, ironically, this new service may actually increase the banks’ clientele,” he explained to Georgian Journal.

“PayPal creates a business opportunity mainly for younger people in urban areas, who know English, have computer and internet skills. To be honest, it isn’t much of an opportunity, if one takes into account that the overwhelming majority of adults here do not possess such skills” – financial analyst Lia Eliava.

Dietrich Muller, a legal and financial analyst, is sceptical about PayPal. The fact that PayPal still keeps Georgia on the list of countries ineligible for accepting payments leaves Muller doubtful. He fears that Georgian businesses will only be able to make purchases via PayPal rather than sell their goods.
According to the official stance of PayPal, despite Georgia still being on the list of countries with restrictions on payment acceptance, it is allowed to accept payments nevertheless. But Muller finds this discrepancy very confusing to business, which, as a rule, demands utmost clarity. Besides, he believes the absence of an official local representative office of PayPal will be an obstacle as well.
“You cannot find a serious partner abroad if you claim that you can accept payments, but he runs a check and finds your country on the restricted list. Why should this partner trust you on just a word?” Muller wonders. “What should a business do when it ends up facing problems such as these while dealing with import and export through PayPal? Is it supposed to appeal for explanation to Singapore, where the international headquarters of PayPal are located? Or is it expected to follow the long chain of PR companies (as GJ found out, PayPal reaches its Georgian audience through the local PR company Noblet Media CIS, which has no direct communication with the PayPal, communicating with it through a Polish PR company) to reach PayPal at last? All this doesn’t sound very appealing. I understand that Georgia is a small market, but if PayPal takes it seriously, it could have a small office here with couple of employees. It looks more like PayPal advertising itself rather than creating any tangible opportunities for Georgian business.”
Besides, alleged cheapness of delivery [of goods purchased via PayPal] to Georgia is debatable. As one of the local PayPal account owners explained to GJ, they cannot use it to purchase goods in China, where they are not as pricy. As for purchases in the U.S., PayPal offers free shipping only within the country itself. Shipping to Georgia is far more expensive than through alternative services available in Georgia (usa2Georgia, for instance).
Lia Eliava, a financial analyst, believes that thanks to its huge reputation, PayPal can create real opportunity for Georgian business. It can make Georgia more integrated in global trade. But the question whether or not it allows acceptance of payments to Georgian businesses is crucial and should be made explicitly clear. However, she thinks that PayPal cannot be much of a help to Georgian business at the moment. The problem is that PayPal service implies internet access – something that many regions of Georgia do not have. It also requires a computer and internet knowhow, which is also a rare quality among older individual entrepreneurs.
“PayPal creates a business opportunity mainly for younger people in urban areas, who know English, have computer and internet skills. To be honest, it isn’t much of an opportunity, if one takes into account that the overwhelming majority of adults here do not possess such skills,” Eliava concluded.
To clarify these questions, GJ has repeatedly asked PayPal for official comments, but it did not provide timely answers.

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