Two years after opening my Paypal account in Morocco, it’s time to take stock, especially as things are getting easier and easier. For those who want to receive payments from abroad easily, a paypal account remains one of the easiest solutions, albeit an expensive one.
The dirham is non-convertible and currency movements are controlled
The dirham is a non-convertible currency. Although many facilities are granted to foreign residents (including the possibility of having an account in convertible dirhams), companies remain controlled.
Theoretically, no payment to a foreign country can be made unless the Office des Changes has given its approval for the purchase of foreign currency, which requires a file with copies of invoices, which takes around ten days.
A paypal account is a breach of exchange controls, and, at least initially, they were strictly controlled.
In addition to the controls imposed by the agreement with the Moroccan government, there are controls decided by paypal, which limits transfers to the bank account, or delays the availability of sums collected until it has ‘confidence’ in the account.
Opening a paypal account
Opening a paypal account is the same as opening a bank account.
The only difference is that you cannot link your paypal account directly to your bank account. The only option is to use an international credit card.
You can choose between a genuine international credit card and an e-pay card, a kind of ‘virtual’ card that is a specifically Moroccan invention.
If you intend to re-use the currency earned via your paypal account, I strongly recommend the ‘real’ card, as the e-pay card is limited to tourist spending (i.e. 10,000 dirhams per year).
If you use an international credit card for your paypal account, you can reuse up to 70% of the currency, as long as you can prove its origin (invoice).
You can of course use the remaining 30%… but in dirhams!
The specific features of a Moroccan paypal account
The basic principle, as communicated when Paypal Morocco was first opened in 2010, was as follows:
- sums collected in the paypal account are not “available”.
- they are transferred automatically and free of charge at the end of each month to the account to which the bank card is attached (i.e. an account in dirhams, convertible dirhams or an export account, depending on your situation)
- all paypal payments are made by direct debit from the bank card.
In other words, it wasn’t possible to build up a small foreign currency wallet and keep all the money collected.
Limits imposed by Paypal
Paypal has been very wary of Moroccan accounts.
There is a maximum limit of €500 that can be transferred to the bank account in a single day.
At one point I was receiving 90% of my company’s turnover via Paypal, and at the end of my second month I found myself in the bizarre situation where Paypal was trying to transfer more than €500 to my account (automatic transfer at the end of the month) while at the same time prohibiting it (transfer limit per day).
I also had the good fortune to be the inventor of a ‘bug’ that caused me many hours of discussion with customer service: since Paypal had an error message – generated by itself – in its transfer, after three attempts, it considered that the problem was my credit card, and wanted to force me to put in a new card… which meant I had to order another one from my bank, and therefore pay the annual fee twice.
However, I learned during these exchanges that the €500/day limit would be lifted once I’d cashed enough on my paypal account (the “enough” not being precise, but between €8,000 and €15,000).
Similarly, blocking the money on the account for thirty days was a Paypal limitation.
In fact, for the last month, after two years of using my Paypal account, the money I receive is immediately available. On the other hand, Paypal no longer makes automatic transfers at the end of the month, and each transfer to my bank account now costs me 5 euros.
Paypal is expensive
Paypal is therefore an expensive solution: fees are deducted at the time of collection and at the time of transfer to your bank account.
As a Moroccan company, I pay more than French companies: whereas a European account pays 3.9% + €0.25 per transaction, in Morocco it’s 4.9% + €0.25.
From USD 3,000 in monthly receipts, it is possible to apply for the reduced rates for merchants, which go down to 3.9% for receipts of more than USD 100,000 per month (I’m a long way from that, so to speak…).
Merchant’ status depends not only on the amount of cash received, but also on your ‘quality’: you must not have any disputes.
Currency conversions
You should also pay attention to the main currency of your account! Moroccans pay exchange charges of 3.5% for payments and 2.5% for receipts for transactions in another currency.
My account is mainly in euros, but I also receive payments in dollars (affiliate income), and that’s expensive!
But bank transfers are also very expensive
And the problem is that they cost my customers! Not just money, but time too.
The ‘fault’ lies with the two banking systems.
On the one hand, in France, banks are not used to transfers for commercial transactions. Compared with Germany or Belgium, two countries where I’ve lived, making a transfer is generally complicated. In fact, for a long time, internet account management tools didn’t allow you to make transfers.
Even today, some of my customers have had to go to their bank branch to make a transfer.
On the other hand, in Morocco, we inherited the French system, and we haven’t improved on it. For example, Morocco does not have a structured IBAN, let alone a SEPA format. The ‘RIB’ is one digit longer than in France, and transfer orders still have to use the SWIFT code. Modernity beckons…
Long transfer times
Transfer times are “random”. Theoretically five working days, they can be extended to ten days, depending on the bank, or even longer, if a small error of one letter has crept into the holder’s name, or if the transfer has gone under the pile at the Clearing House in Casablanca.
So I’ve ended up systematically asking my customers for a copy of their transfer order, and sending it to my bank after five days ‘there’s something I’m missing’.
(If you sense a slight irritation in this paragraph, … you’re right).
Insane charges at some banks
Because it’s ‘manual‘ (since Morocco doesn’t fit in with the standards), my customers regularly find themselves charged fees that generally exceed €30 for a single transaction.
The worst was La Poste, which charged a customer an additional €40 for a €90 transfer.
Suffice to say that to keep my customers, I absolutely need another solution.
Customer mistrust?
I use Paypal for my web business and for my husband’s travel agency, in other words for two activities where the sale is made after making contact and a personalised proposal.
So I haven’t suffered from the problem of trust that some people may have with Paypal. On the other hand, for an online shop, I think it’s essential to offer payment by credit card (we’ll come back to this in another post). Indeed, for a European customer, a Moroccan online shop is already a source of mistrust, and only offering Paypal adds a second layer…. perfect for missing out on sales.
In the tourism sector, many service providers offer Western Union. This is a solution that I do not recommend, either as a supplier or as a customer. Whereas Paypal offers buyer protection similar to that of a credit card payment, with Western Union, once the money has been sent, that’s it. And for the service provider, he is faced with much greater mistrust.
To sum up:
Paypal in Morocco is expensive, but cheaper than transfers from France. It remains one of the most flexible and practical solutions for collecting foreign payments. It makes life a lot simpler than the traditional banking system.
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