PayPal’s Epic Fail in Russia and Ukraine

I have discussed here quite a few times how limited PayPal is for users in the country I happen to live in, Russia. For those of you who are not aware of the problem, Russia for PayPal is on the list of countries with limitations where users are allowed to send money using their credit cards but they are unable to receive payments or even upload money to their PayPal balance. Obviously, it makes PayPal extremely one-sided and rather impossible to use. This has been a reason for many complaints from users but has never resulted in a change of PayPal’s policy.

If you ask me as someone who knows what internet-based business is and what business in Russia is, I fully understand exactly why PayPal does not hurry to get into Russia. There are so many problems with corruption, legislation and lack of reasonable financial regulations for online businesses that I can easily foresee problems for PayPal which might be discouraging even despite of the booming online business in the country. Which is exactly why despite of all my complaints I never really expected to see PayPal here fully functional any time soon.

So you can probably imagine my surprise when last week I saw a little piece of info on a popular Russian tech blog about PayPal changing policy for a few countries, including Russia and Ukraine, and including us in the list of countries with users able to both send and receive money. Effective September 24. Hopes or no hopes, I was obviously glad and could not help but fantasize about how cool it would be to use my Russian account fully instead of relying only on my corporate US account for all the transactions.

I did not really need it badly but I could see some possible uses and I was glad for all those Russian users who were cheering about the new opportunities involved in not making their international customers deal with things like Moneybookers or Western Union any more.

However, today I have noticed a totally different link: to an explanation of PayPal representative to a Russian news website regarding how inclusion of Russia and Ukraine in the list of unlimited countries was nothing but a mistake on their part. And given how happy people were about the initial news, now they are equally unhappy and do not demonstrate any positive feelings or understanding to such ‘mistakes’ made by huge corporations.

Freelancers who have already promised their current customers PayPal is now a payment option for them, are understandably unhappy. Those who were already considering selling famous Russian products on eBay and planning their businesses accordingly, are more than upset because the opportunity is lost again. However, this is way more believable than the initial piece of news was anyway.

There are voices suspecting that the decision of removing Russia and Ukraine from the already published list of countries was not voluntary for eBay and was supported by a lobby of the Russian e-money providers which have rather strong positions (and support in the government) and must be afraid of a powerful competitor entering the Russian market.

Yet while it sounds perfectly reasonable, I think such decisions are made way before their official announcements so PayPal must have made sure everything was ready before modifying their policy so the explanation about a simple mistake sounds more or less reasonable – even though I can hardly imagine an error of such a scale in a huge corporation people have grown accustomed to trust.

Now if you ask me, it could have really been better to maintain the status quo that Russian users have been living in for years and got totally accustomed to instead of showing us the carrot only to take it away a few days later. Now the number of disappointed potential users is extremely huge and the rapidly growing market may forever remain nothing but an opportunity for PayPal.

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