PayPal Gives Palestinian Tech Firms The Cold Shoulder

In a controversy that may bring Middle East politics to the payments realm, PayPal is being petitioned by dozens of Palestinian firms to let the platform work for those Palestinians based in the West Bank and Gaza.

TechCrunch reported that the payments platform does not work in those areas for Palestinians but does work for Israelis based in West Bank settlements — even though the two disparate groups are in quite close proximity geographically and share the same currency, the shekel.

The site noted that the open letter by the 43 Palestinian companies and organizations came after a request for a formal meeting with the firm was “ignored,” according to TechCrunch. The firms came together under the umbrella of the Americans for a Vibrant Palestinian Economy and stated to PayPal via the letter that the service is operant in more than 200 countries globally, some with economic and political landscapes less stable than Palestine. As the letter stated: “We have been told that PayPal is concerned about the compliance investments required to enter the Palestinian market. We believe such costs have been greatly overestimated. The U.S. Treasury Department has spent a great deal of time working with the Palestine Monetary Authority to strengthen safeguards against abuse. PayPal currently operates in over 203 countries, including places with major problems of corruption and terrorism, like Somalia and Yemen. We are confident that Palestine will prove a much easier place to profitably do business than these and other markets that PayPal has already entered.”

In an interview with TechCrunch, a spokesperson for Gaza Sky Geeks, a startup accelerator based in the region that signed the letter, stated that the firm is “a major work hub for startups and freelancers in Gaza — payments are one of the toughest issues for them. After working tirelessly to win business in the global marketplace, they then have to pay steep fees for wire transfers or foreign banks to get paid. PayPal opening here is one of the most immediately impactful moves that could be done to support the economy here. Gazans we work with can’t understand why PayPal serves Israelis living in the West Bank and is open for business in counties like Yemen and Somalia, but not here. Businesses in Gaza and the West Bank just want access to the same opportunities PayPal affords to the other 200 countries and territories they serve.”

TechCrunch stated that, in response to its own queries to PayPal (which has its risk team based in Israel), the firm said: “PayPal’s ambition is for everyone ultimately to have access to our services for digital payments and commerce, in accordance with applicable regulatory requirements. 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.”