Many of us have started seeing the local banks rolling out their Linx Visa Debit cards and ads asking us to join their e-commerce platforms. Others have ignored them in favour of using Paypal because that’s what international folks know. But do you know the perils for us to use Paypal vs local payment processors?
If you haven’t taken a minute to look at that video, I advise you to check it out, as it explains just how Paypal drains the Forex from our countries.
Here is also an excerpt taken from the Sunday Express on June 14th.
So what exactly are we to do? Many of those looking to finally build their websites are using popular platforms like Squarespace, Wix, Shopify and those using them have Paypal as the processor set up.
With the new Linx Visa Debit cards not having access to Forex, this means that your clients locally will not be able to make purchases on your website, since Paypal settles all of their transactions in USD.
If you are using a platform that allows you to set up a payment processor from your local bank, Wipay or Buzzpay, since all of those transactions would be settles in our local currency, anybody with a Linx Visa debit card can shop on our website. Also, if someone from another Caribbean country is shopping on our site, it won’t drain their Forex as well.
One of the big concerns using local payment processors is the fear that international clients won’t be able to shop on our sites or pay a digital invoice and there is a concern for those who are looking to keep the actual USD.
Both concerns have solutions. For one, anybody in the world can conduct business on your website or pay your digital invoice, even though you are using a local processor.
Secondly, companies like Wipay also allow you to process payments in USD and it will deposit those funds in your local USD cash account.
What I advise everybody to do is to understand when and why to use the various payment methods.
I use Paypal if I am in integrating a payment processor with specific tools online. I use a scheduling tool like Acuity but that integrates with Paypal and not our local processors.
So we just need to keep in mind when and why to use certain processors.
This issue is critical, the more we drain our Forex, the dire our situation becomes and there will be more restrictions on what we have access too.
We have already seen all of the banks discontinue all pre-paid credit cards in an attempt to curve the Forex leakage from Credit Cards. As the report above states, Credit Cards account for 28% of the Forex spend which is one of the largest areas of leakage.
We can do our part by getting educated on the local platforms, systems and tools and incorporating them into our operations.
When thinking of PayPal vs local payment processors, try to help all of us out and figure out how to use the Caribbean options.