Roland Turner

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PayPal problem VV44REXSG (KMM201394745V73460L0KM) and the lack of a Singapore remittance license

3 years ago, PayPal ceased handling payments from Singapore account holders to charities outside of Singapore. The cited reason is that PayPal does not hold a remittance license in Singapore. An important consequence of this is that payments from Singaporean PayPal accounts to any non-profit organisation outside of Singapore, charitable or otherwise, are prevented. Inconveniently, and despite the fact that this is not a secret at all, PayPal appears unwilling to correctly describe the reason for payment failure at the time that a payment is declined for this reason.

Over the last few years this has bitten me a couple of times while preparing for visits to Sydney and trying to pay for short-term membership of Fishburners which, despite hosting startups that are very much for-profit, is itself a not-for-profit. The payment failure message at the time was:

We're sorry, but we can't send your payment right now.

Calls to PayPal's helpdesk yielded unhelpful advice along the lines of trying again later. Only after pressing on a second or third call did someone think to look more deeply, and notice that it was a result of the non-profit status of the recipient.

It now appears that PayPal has "improved" this situation. I recently attempted to purchase a copy of a publication from a publisher in the US and the transaction was declined citing a vague requirement to comply with government regulations, without identifying any regulations in particular. Sadly I did not retain a copy of the message, however the response to my "please explain" to PayPal was rather hair-raising:

I have personally reviewed your PayPal account, please be advised that as
a US company, PayPal and all of its subsidiaries are obliged to comply
with US government-imposed sanctions, even if these subsidiaries operate
outside of the US. These regulations require us to either immediately
decline or place a payment in a pending status for further review when a
payment is flagged as possibly violating these sanctions.  Both the sender
and receiver will be informed of the status of the transaction. 

The U.S. Office of Foreign Assets Control (OFAC) administers and enforces
economic and trade sanctions against specific countries and individuals.
PayPal, Inc. and its subsidiaries are required to immediately decline or
place a payment in a pending status for further review when a payment is
flagged as possibly violating these sanctions.

I am an Australian national, resident in Singapore and was purchasing from a US organisation. None of these is subject to whole-nation sanctions, and neither the publisher nor myself are listed on OFAC's sanctions list (fortunately!). I pressed, and after further investigation by PayPal helpdesk people was advised that in fact the problem was the publisher's non-profit status and PayPal's lack of a Singapore remittance license. It hadn't occurred to me that the publisher might be a non-profit (yes, I can now see that there was a clue right there in the domain name).

I take PayPal's "we are committed to complying with all applicable laws and regulations in every jurisdiction that we do business in" stance for granted, but is it too much to ask that error messages be informative, and that helpdesk people don't bandy about mention of investigating possible sanction breaches where that possibility is not even being considered?