The Financial Supervisory Commission (FSC) yesterday said that it respects US payment service provider PayPal’s decision to cease processing domestic transactions within Taiwan.
The US company on Wednesday released a statement saying that beginning on Sept. 21, it will no longer process domestic payments due to the nation’s regulatory limits.
However, users can still use the service for cross-border transactions, PayPal said.
The change coincides with a software update by the company, which is set to go live on the same day.
“We respect the business decisions of companies,” FSC Banking Bureau Deputy Director-General Jean Chiu (邱淑貞) told a news conference in Taipei.
“PayPal, whose international office is registered in Singapore and is not registered as a Taiwan-based subsidiary, was barred from processing domestic payment transactions when amendments to the Electronics Payment Processing Institutions Act (電子支付機構管理條例) took effect on May 1,” Chiu said.
However, Chiu outlined several options for PayPal to consider if the company wanted to continue domestic payment transactions.
“As the company’s payment transaction volume does not exceed NT$1 billion [US$30.4 million] annually, PayPal will not be required to apply for an operating license as stipulated by the Electronics Payment Processing Institutions Act. Instead, it can apply to the Ministry of Economic Affairs as an affiliate or a subsidiary company in Taiwan,” Chiu said.
When asked if PayPal is violating guidelines by continuing to process domestic payments until Sept. 21, Chiu said that the case is under the jurisdiction of the Ministry of Economic Affairs and that the commission does not plan to pursue the matter.
Chiu said that the commission welcomes all participants in developing Taiwan’s electronic payment capacity and PayPal could partner with a local electronic payment service provider if it wanted to continue to provide its services.
PayPal has an ongoing e-commerce transaction partnership with E.Sun Commercial Bank (玉山銀行), whereby the Taiwanese bank receives US dollars from offshore buyers and converts the funds into New Taiwan dollars as payment for domestic sellers.
The US company’s partnership with E.Sun Bank remains unchanged.
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