FNB brings PayPal to South African consumers
PayPal has at last officially arrived in South Africa thanks to a partnership with First National Bank (FNB), allowing the country's citizens to top up and withdraw funds through qualifying FNB accounts, and FNB credit cards used for PayPal transactions also attract eBucks rewards.
After setting up their new PayPal account online, FNB customers are able to:
- Make or receive payments for goods and services online;
- Shop online at merchants in 67 countries;
- Pay for things without sharing their financial information (e.g. card details);
- Transfer money between an FNB account and their PayPal account.
According to Michael Jordaan, FNB's CEO, "This agreement with PayPal enables international businesses and individuals to transact with South African service providers through a secure payment service. And the top-up and withdraw service will also allow South Africans to make payments and receive money internationally without sharing their financial or personal information."
Customers with a qualifying FNB account (cheque, savings or transmission) and a qualifying online banking profile (those other than 'Enterprise' business banking users) can open a new PayPal account online, then link it to their bank account in order to make and receive payments in 21 different currencies. FNB converts foreign currencies into Rands when the money is transferred to or from the member's account.
FNB customers can also use their FNB credit cards when shopping with PayPal merchants by linking the card to their PayPal account first. Such transactions still earn eBucks as for any other credit card purchase. However, credit cards - even when properly linked to the PayPal account - cannot be used for either top ups or withdrawals.
To use the PayPal service, FNB customers simply log in to their online banking profile and choose the 'PayPal Services' menu. From there they can use the 'Top Up' feature to transfer funds (with amounts being specified in South African Rands) from any qualifying FNB account into their PayPal account (credited in US Dollars). During this process the customer is required to disclose the purpose of their transaction, and provide accurate contact details to ensure that they comply with South African Reserve Bank regulations for cross-border payments.
The 'Withdraw' service allows customers to extract funds (specified in US Dollars) from their PayPal account, crediting the appropriate number of Rands to a qualifying FNB account. This is a key feature because, according to South African Reserve Bank exchange control regulations, all funds received into a PayPal account must be withdrawn within 30 days of receipt. As for top ups, the withdrawal feature also requires disclosure of the purpose of the transaction, along with contact details to ensure compliance with Reserve Bank regulations.
FNB charges a commission of 1.5% for each top-up or withdrawal transaction, calculated on the Rand equivalent of the US Dollar amount requested. A top up can take 1 - 4 days to reflect in the customer's PayPal account, and a withdrawal can take 3 - 6 days to be cleared into the customer's FNB account. There is no daily limit on either top ups or withdrawal transactions, but the South African Reserve Bank's annual allowance still applies to all customers.
While cross-border trade now accounts for approximately 25% of PayPal's total payment volume, the new FNB/PayPal partnership was granted approval by the Exchange Control Department of the South African Reserve Bank.
Having opened in 1838, FNB claims some 6 million customers nationwide and is part of the FirstRand financial services group, being the biggest single contributor to the group's bottom line. Since 2004, FNB offices have opened in Lesotho, Mozambique and Zambia, following earlier expansions into Swaziland, Botswana and Namibia.
PayPal, which was founded in 1998 and is now owned by eBay, allows its members to send money without sharing financial information, with the flexibility to pay using bank accounts or credit cards. The service boasts more than 81 million active members (representing some 210 million accounts) in 190 markets, and provides access to 24 currencies worldwide.