Paypal gap holds back Sri Lanka’s online fashion aspirations
ECONOMYNEXT – Sri Lanka’s apparel firms that have built brands and would like to sell online are constrained by the lack of Paypal or similar facility, an industry official said, joining the chorus of calls by the information technology workers who also want to receive inward payments.
“The growing increase of B2C (business to customer) transactions is clearly visible in that large number of companies engaged in such e-commerce,” Chairman of Sri Lanka Apparel Exporters Association Rehan Lakhany said.
“This has shown remarkable progress, that traditional retail shop concept will be of minimal value from time to time.
“The major issue that we are facing today is the absence of a mechanism to receive payments online from the consumers if we are engaging in e-commerce in its proper sense.
“In view of growing demand and the need to facilitate transactions of these nature, it will be necessary for the government of Sri Lanka to create a mechanism similar to PayPal enabling us to receive payments online.”
Already Sri Lanka’s apparel firms were permitted to ship up to 3,000 dollars worth of goods to individual customers, allowing firms to supply top online retailers.
“In this connection, we are thankful to you sir for creating an environment at our request for us to undertake B2C transactions on behalf of brands,” Lakhanay said, addressing Sri Lanka’s Treasury Secretary Sajith Attygalle, who was at the forum.
“Though we send the goods to the consumers, he/she makes payments to the brand owner and the brand owner pays us,” Lakshany said.
“We have to go beyond this operation particularly, where we can supply our own products to the consumer directly.”
Fashion and accessory sales is one of the fastest growing e-commerce segments in the world, according to several studies, with China, US and UK, leading in volumes. Many Asian nations are also catching up fast.
According to some studies, more than a third of apparel and footware sales could take place online by 2020, with total sales of around 700 billion dollars.
Some Sri Lankan firms are using payment gateways to receive cash from customers who have credit or debit cards, but in many countries, consumers have got used to using Paypal.
Meanwhile Treasury Secretary S R Attygalle said the government would look into the matter.
“We will address the requirement to have a payment gateway that will facilitate the e-market place where Sri Lankan brands and companies will have more opportunities,” he said.
Paypal is an electronic platform which allows customers to send and receive payments and is widely used around the world where potential customers already have such accounts, without using credit cards.
In Sri Lanka outward payments can be made through Paypal by linking credit cards, but resident customers cannot link their bank accounts to the platform to receive payments.
Sri Lanka’s information technology workers, who do contract work for foreign firms from home, have also called for Paypal inpayments to be facilitated. There are however some other platforms, allowing workarounds.
Sri Lanka’s central bank has said that they have no objection to payments being received through Paypal and have encouraged the firm to make inward remittances to Sri Lanka, but the international firm has not added the island to their network.
There were attempts made by the authorities to get Paypal to add Sri Lanka to their network.
According to some officials, PayPal’s expectations of weak volume, undermining the business case for payments, while another said potential liabilities from Sri Lanka’s forex laws was a concern at one time. (Colombo /Feb17/2020)