Insult to injury – first no Paypal; now no Payoneer!

May 5, 2010 at 8:48 pm 25 comments

We have been holding a discourse for quite a while about Paypal not including Pakistan on the list of countries in which they operate. They operate in 189 countries of the world. The only ones they don’t operate in are Cuba, Pakistan, Iran, North Korea, Afghanistan and Syria. This post from Faisal Khan provides the details. We have been trying to find out why this is so. Several people have tried to get an answer from Paypal, we have also tried to find out from the US Department of Commerce if there is any US regulation that is stopping Paypal from offering its services in Pakistan. As the efforts continue to bring Paypal here, insult has been added to injury as freelancers and small companies using Payoneer cards very recently received this message:

Due to a change in requirements from our regulators, as of June 1, 2010 Payoneer cards will be blocked for transactions in the countries listed by the US government as having strategic Anti Money Laundering (AML) deficiencies. This change will affect card usage in the following countries: Angola, Ecuador, Ethiopia, Pakistan, Turkmenistan and Sao Tome and Principe.

If your card is in use in one of the countries listed, we encourage you to use all funds by May 31, while transactions are still possible in these countries.

Please note that beyond May 31 your card will continue to be fully functional in all countries not banned by the US government, and we will be happy to load payments to the card without any change.

We apologize for the inconvenience and hope that the Payoneer card will continue to provide you with valuable service.

This means that all the freelancers and small businesses from Pakistan who used oDesk,,, RentaCoder, (there are many such individuals and companies who have been providing quality services to customers around the world through these sites) suddenly find themselves without a payment mechanism.

Some of the youngsters who have been affected wrote to me and asked if I could help. I know they are not members of P@SHA but they are part of the technology community (and this will affect more than just technology providers – it will affect anyone that is using Payoneer as a service to do any kind of online business).

So why has this suddenly happened? Didn’t we have an Anti-Money Laundering Ordinance in place? Of course we did – and that kept us off the list of high risk Money Laundering countries although everyone knew that we would only be taken off the list completely once we had a permanent law in place.

Are the claims regarding the AML deficiencies  that they mention in the message sent to providers valid?

Check this out:

QUOTE … ntandnbsp/

The FATF welcomes Pakistan’s efforts to ensure that its Anti-Money Laundering
Ordinance (AMLO) remains in effect and to implement a permanent AML/CFT
framework through legislation. However, FATF remains concerned regarding the
ML/FT risks posed by Pakistan and reaffirms its public statement of 28 February 2008
regarding these risks. In particular, the FATF expresses concern that Pakistan’s Anti-
Money Laundering Ordinance (AMLO) will expire on 26 March 2010. The FATF
strongly urges Pakistan to implement a permanent AML/CFT framework before the
expiration of the AMLO and strongly encourages Pakistan to establish a
comprehensive AML/CFT framework.


I am not sure how good or bad this Ordinance is.

Advocate Nighat Dad tells us that The Asia Pacific Group on Financial Action Task Force (FATF), did not blacklist Pakistan but actually upgraded Pakistan’s ranking from the list of high risk countries to the lowest risk countries or Category III.

FATF had given Pakistan a February 2010 deadline for formal conversion of the ordinance into an Act of Parliament and it was expected that strict action might be taken against Pakistan, including dishonouring of letters of credit, if it failed to pass an Anti-Money Laundering and Combating Terrorist Financing Act.

However, President  Zardari signed the approved legislation on Anti-Money Laundering and Terrorist Financing Act on 26, March 2010  after getting approval from both houses of parliament. Here is the link to AML Act 2010

The FATF is now scheduled to meet at Amsterdam in June 2010. In the meantime Nighat is going to have an indepth look at the Act because there appears to be concern in some quarters that parts of the Act have been amended and may infringe on Privacy, Human Rights and rights of businesses. Some parliamentarians actually suggested that the Act needs to be discussed again clause by clause. We are going to have Nighat and some other experts look at it before we comment any further on this.

If anyone has suggestions for alternate payment mechanisms that these kids can use in the meantime, kindly let us know.

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25 Comments Add your own

  • 1. Obaid Ahmed  |  May 5, 2010 at 9:13 pm

    While this is truly sad, I do believe that this is the time to put pressure on the government & banks to become competent enough so that we don’t get slapped by such policies. Unfortunately, we don’t hold the cards in our hands, so we have to play by “their” rules.

    • 2. Aamir  |  May 15, 2012 at 3:10 pm

      “Unfortunately, we don’t hold the cards in our hands, so we have to play by “their” rules.”

      Maybe this is the reason why Pakistan is lagging behind in implementing anti-money laundering and anti-terrorist funding regulation. I hope after bin Laden was shot near Islamabad, Pakistan can implement AML and TAFT rules.

  • 3. Hameedullah Khan  |  May 5, 2010 at 9:29 pm

    Thank you Jehan Ara for taking notice of this and writing a blog about it, I hope we all will be able to put enough pressure on our lazy government to make them work. Really sad and shameful situation.

  • 4. Jehan  |  May 5, 2010 at 9:36 pm

    @Obaid, I agree we need to put our house in order so we are no longer so dependent on others.

    @Hameedullah Actually I have Ali Saif and others to thank for bringing this to my attention. I have already posted this on the PakistanICTPolicy group and send an email to the new MD of the Pakistan Software Export Board (PSEB). I will be in Islamabad on Friday and Saturday and will try and meet up with some of the government guys to see if I can shake things up a bit.

  • 5. Munir  |  May 5, 2010 at 9:53 pm

    Its indeed an alarming situation and we must put pressure on responsible bodies. Thanks for taking immediate action on this serious issues.

    As far as alternate payment mechanisms is concerned, here is what oDesk officially proposed after this incident:

    I hope other freelance sites will also provide alternates very soon.

  • 6. Munir  |  May 5, 2010 at 10:05 pm

    Here are some facts and links which may help you to strengthen your case when you talk with officials:

    – Pakistan is one of top oDesk’s “value for money” outsourcing rankings

    – Pakistan on oDesk Economy. You can see there are more than 11,000 Service providers from Pakistan

    – Pakistan ranked number 2 in Top 10 Coder Countries last month on Rent A Coder

    – There are many providers/companies ranked in top 50 from Pakistan

    Sources: and

  • 7. Muhammad Adnan  |  May 5, 2010 at 10:42 pm

    well, Jehan Ara.

    We all freelancers are looking forward to you. Hope Situation gets better INSHALLAH


  • 8. Nony Mous  |  May 5, 2010 at 11:39 pm

    I think important issue right now for Parliament & Senate is naming everything to a particular deceased leader. Second comes increasing cost of doing business thanks to covert IMF constitutionalities to compensate for loans doled out to 60 years to our leaders who have stored them in bank accounts abroad. Third comes protecting politicians business cartels.

  • 9. Shakeel Abbas  |  May 6, 2010 at 12:06 am

    Good to see that some one is working it.

    I am also effected as i do freelancing part time.

    I don’t know how to convince government to take a serious action

  • […] This cup of tea was served by: In the Line of Wire […]

  • 11. Ali  |  May 6, 2010 at 5:49 am

    Even though for some this might seem like a little issue and just like any other problem of Pakistan, will become part of history and we will forgot about it in coming days. But to me its just a signal to what will be coming next, most of people rely on such payment gateways to keep their day to day living. Think about a mom blogger getting paid for writing and managing her household, a student freelancer getting his university dues being paid. Doors are closing down little by little and we are short of time now. The NYC incident has put Pak in spot light again so be sure there are other financial restrictions to come, the right time is now or it will be too late.

    Jehan Ara, I urge you to do whatever in your capacity to help fix this problem or atleast avoid in future or else there will days when we all get banned from all kind of payment gateways and freelance sites and outsourcing will be our another achievement being mentioned in the books of history for our generations to come!


  • 12. Kashif Nawaz  |  May 6, 2010 at 7:59 am

    Flash Back, Last year event at LUMS, Gohar’s irritation at not being able to find any reasonable payment mechanism for Pakistan.
    Most of the people in the Hall insisting that there are alternate way and people are doing their business
    Alternates presented were included,
    1- get a route through UK
    2- Open an account in Dubai and get rout from there
    3- 2CO etc…
    But question is still the same, Do we really want to change it or we are just talking for the sake of saying something

  • 13. Jehan  |  May 6, 2010 at 8:36 am

    @Munir thanks for some very practical feedback. I think oDesk’s response is admmirable but we really do need to find a permanent solution.

    @Ali yes we are all concerned. Let us see what we can do.

    @Kashif, after Gohar put this question, there were a number of useful suggestions in addition to what you point out. I understand the frustration but a number of people have been doing more than just talking to change the status quo. If it was in our control we would have taken action. All any of us can do is try and find a solution. We will continue to do whatever we can so please do not belittle the efforts some people are making. They are genuine efforts – and not just talk!

  • 14. hamza  |  May 6, 2010 at 10:15 am

    Moneybookers is a payment service I’ve used in the past here in Pakistan, also mentioned in the Odesk post.

    On a side-note, I remember from the time that paypal Did work in pakitan there were a lot of phishing attatcks orginating from Pakistan. The scammers targetted relatively small amounts from each account, thereby coming under the statistical chance of being investigated by Paypal and making up for that by the number of accounts they targetted. The company’s anti-money laundering works by prioritizing cases partially based on the volume of the money invovled, so that the limited numbers/resources of investigators target those frauds where the benefit of recovery is largest. Paypal shut off soon after that. I’m surprised people do not know about this..

  • 15. Maxi  |  May 6, 2010 at 3:04 pm

    I agree with 10th comment by Ali. Those who follow history know how Yugoslavian economy was imploded right before the breakup with help of overt and covert measures of few selected nation. I urge all people to prepare something when s*** hits the fan in coming days.

  • 16. Tomer from Payoneer  |  May 6, 2010 at 6:56 pm


    Tomer from payoneer here.

    As of June 1, 2010 Payoneer was required by US regulators to stop transactions to Pakistan.

    We fully understand the problem this will cause to our cardholders and we are trying to find a solution.

    The solution might include additional verification checks to demonstrate to regulators that Pakistanis cardholders can indeed use Payoneer cards.

    We will update you as soon as possible. Please know that we, at Payoneer, are doing all we can to find a solution.


  • 17. Jehan  |  May 6, 2010 at 7:35 pm

    @Tomer thanks for responding to the concern of the young developers from Pakistan. We will of course try and take this up with the US government but you know that it can be a slow process.

    We will appreciate whatever you can do to address the regulators’ concerns – verification checks, previous history, etc – that can result in Payoneer cards becoming functional again. Thanks again.

  • 18. Abrar Pasha  |  May 7, 2010 at 11:00 am

    This is not the new for me, I’m facing hard difficulties since 2002 about the issue of outside country payments. Just I want to share one solution that how I’m being paid by Paypal or Paypneer account here – only by 2Checkout. Yes 2CO is the only way to get payments from clients either they have Paypal or Payoneer account. I’m bound to pay around 6% to 2CO (very high than other solutions but no other choice!).

    I’ve lauded several times about this “tech discrimination” from Paypal (and now Payoneer too) but no response even writing the new president of PayPal, Scott Thompson.

    I think we should need accumulate and more stronger voice from all IT companies/boards as well as government than could be possible to get facilitate from these companies.

  • 19. Jazib Ullah  |  May 7, 2010 at 4:28 pm

    Thanks a lot Jehan Ara for posting this!

    I totally agree with Ali
    “and outsourcing will be our another achievement being mentioned in the books of history for our generations to come!”

  • 20. Afaque Ahmed  |  May 8, 2010 at 1:17 pm

    Jehan Ara,
    How about this…. Under the auspices of PASHA, a company should be formed, either in Pakistan or outside of Pakistan, to perform payment aggregation functions to support the SME sector, especially the tech companies. In short, this business problem can be solved in a matter of 3 months.

    Solving Pakistan’s legislative, regulatory, enforcements and judicial problems in this sector is going to take a very long time, although I agree we should continue to work towards that goal. If entry into Pakistan’s market makes sense for PAYPAL and others, they will do it in a heartbeat even if it requires twisting a few arms in GoP.

    Until that time, the industry should focus on quickly solving their problems, preferably with home grown solutions, such that they can focus on the actual business, and in bringing foreign exchange to Pakistan and creating employment in Pakistan.

  • 21. Anonymous  |  May 9, 2010 at 10:57 pm

    […] Insult to injury – first no Paypal; now no Payoneer! In the Line of Wire I think freelancing is one of the emerging industries in Pakistan which is providing people […]

  • 22. Hammad Siddiqui  |  May 13, 2010 at 12:37 pm

    Jehan, I think P@SHA should write to the respective ministries to look into this. You know, The Old Policy Advocacy Stuff you have been doing, and doing it extremely well too!

  • 23. Habib  |  August 29, 2010 at 1:24 am

    Hi All,
    Payoneer and Odesk have solved the issue and sent a new Debit Card to Pakistani Freelancers..
    I received it two month ago and can use it in RBS and HSBC. I guess it would work in City Bank. Not sure about Standard Charted Bank (it gives processing error)..

    I am afraid if wire transfers are banned what we will do then? (Last choice) because our IT ministers do not even care about any thing and I guess they do not know anything about IT business… We are loosing much due to the negligence of our government…

    They must push the banks in Pakistan to put pressure on Paypal. Its impact would be huge if paypal authorize Pakistan.

  • 24. SalmanAbbas007  |  December 30, 2010 at 12:14 am

    Yeap resolved now, Using my Card 😀

  • 25. Payoneer Sign Up  |  August 7, 2015 at 9:09 pm

    Payoneer Sign Up earn free 25 $ with best payment processor in the world.


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