PayPal, one of the world’s most popular electronic money transfer companies, has recently changed its practice and introduced new rules for users in Serbia.
All those who have so far linked their account with a foreign currency account in one of the domestic banks through this platform were able to transfer and withdraw money in foreign currency with the payment of a fixed commission. Now PayPal automatically converts all foreign currency amounts into dinars, at a very unfavorable exchange rate.
However, this is not the only conversion. Until the payment arrives, the money often goes through one or even two more conversions, whereby the client can lose as much as ten percent of the money he transferred from PayPal.
The National Bank of Serbia says that they are familiar with the new practice of PayPal, which implies the obligatory conversion of foreign currencies into dinars when transferring money to accounts in Serbia, but that no local regulation has conditioned this company to change its business policy in our country.
They explain that the NBS does not have any supervisory powers over the operations of PayPal, which is a foreign electronic money institution whose headquarters are in Singapore, nor the legal basis to take measures prescribed by the Law on Payment Services.
According to the Law on Foreign Exchange Operations, citizens and companies are enabled to perform transactions through foreign electronic money institutions, but the competent authorities in Serbia cannot control the operations of this company because its commercial presence is not in our country.
In other words, the NBS does not have mechanisms by which it can influence the change of PayPal’s business policy towards Serbian residents, because it does not even have a license from the NBS as a payment service provider, they say in the NBS for Politika.
The National Bank explains that, regardless of all the above, they have already contacted PayPal and asked for an explanation. The change in practice in Serbia, they confirmed, was caused by changes in PayPal and allegedly has nothing to do with regulations in Serbia.
The users of these services have no choice but to be persistent and to address this institution with a request to make changes in each individual case in order to avoid unnecessary and unwanted currency conversions, ie additional costs associated with these conversions, the NBS advises, BizLife reports.
