PayPal and Stripe to launch in Pakistan soon, confirms IT Minister

• Pakistan expects positive updates on PayPal and Stripe’s arrival soon, says the IT Minister.
• Pakistan has 1.5 million IT freelancers, the world’s second-largest online workforce.
• The auction process for the 5G spectrum has been initiated.

Caretaker Federal Minister for IT and Telecommunications, Dr. Umar Saif, has announced that Pakistan will receive ‘positive updates’ about the introduction of PayPal and Stripe payment gateways in the coming weeks.

Dr. Saif, speaking alongside Caretaker Information Minister Murtaza Solangi, highlighted the absence of suitable financial tools to support the emerging freelancing community in the country.

“These companies have their apprehensions, including the FATF issue. Despite this, we are seeing progress. I am optimistic that we will hear good news regarding PayPal and Stripe in the coming four to six weeks, and through any formula, we will provide these services to our freelancer community,” he said.

“Dr. Saif mentioned that 1.5 million Pakistanis are engaged in IT freelancing, making the country the second-largest online workforce,” he said.

“However, the lack of infrastructure is holding us back. Through the E-Rozgar program, interest-free loans will be provided to the private sector, under which co-working space for 500,000 people will be established,” shared the minister. The interim minister highlighted that Pakistan’s IT sector consists of approximately 19,000 companies, offering employment to 150,000 people and contributing $2.5 billion in official exports.

Dr. Saif mentioned that several IT companies store their foreign exchange reserves and earnings abroad due to restrictions on repatriating US dollars.

“As per a conservative estimate, Pakistan’s IT exports stand at $4–4.5 billion; however, this is not the case due to restrictions on US-dollar spending,” he said.

“Through the efforts of the IT ministry and P@SHA, the authorities have now been allowed to retain 50% of their revenue in a US dollar account. These companies will be provided corporate debit cards by the banks, which can be freely used to make international payments,” he said.

A few days ago, the State Bank of Pakistan (SBP) raised the allowable retention limit for IT exporters from 35% to 50% of their export earnings in the Exporters’ Specialized Foreign Currency Accounts (ESFCAs) to support IT exporters in increasing their exports of IT and IT-enabled services.

Furthermore, there has been increased flexibility in utilizing the retained funds. The SBP has eased the use of balances in the ESFCAs by permitting IT exporters to make payments from these accounts without requiring approval from the SBP or banks. This measure was taken based on recommendations from the IT industry, with the goal of stimulating software, information technology (IT), and IT-enabled services (ITeS) exporters, as well as freelance services, to enhance export earnings and contribute additional foreign exchange to the country.

“Amid this decision, we believe that a number of IT companies, which were compelled to keep their reserves outside, will bring their liquidity into Pakistan, and our IT exports will soon reach $3.5–4 billion,” said Dr. Saif.

The interim minister pointed out that while there is substantial demand in the IT sector, Pakistan faces a shortage of a skilled workforce.

“We are working alongside the Higher Education Commission (HEC), under which a standardized test for IT graduates will be conducted. Those who clear it will be provided with a mandatory apprenticeship in the IT industry,” he said.

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Referring to his recent trip to the UAE, where he participated in the GITEX conference, the interim minister highlighted the substantial potential for Pakistani IT firms. Regarding startups, he emphasized the need for the government to support investments in the startup sector.

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“In the coming weeks, we will launch the Pakistan Startup Fund, under which we will facilitate and collaborate with global venture capitalists to invest in Pakistani startups. In the coming years, Pakistan will see billion-dollar startups,” he added.

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Dr. Saif announced that the auction process for the 5G spectrum has been initiated.

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We are collaborating with the Pakistan Telecommunication Authority (PTA) to introduce a mobile phone financing program that will enable individuals to buy premium smartphones through installment plans.

“Through this measure, a market for high-end phones will be established in the country,” he said.

Dr. Saif said the government is working on enhancing cyber security and protection against online data theft. “A cyber-security authority will be announced in the next few months,” he added.