PayPal plan for office in Dubai hit by setbacks

PayPal's plans to open an office in Dubai have been delayed. The online transactions company blames administrative setbacks.

PayPal's plans to open an office in Dubai have been delayed by almost a year because of administrative setbacks.

The online transactions company had initially planned to open an office in Dubai Internet City by the end of last year to cater to the rest of the Middle East region.

"These things can take a long time," said Elias Ghanem, the managing director of PayPal Middle East and North Africa. "We have been held back by the admin work, but things are in progress."

PayPal has singled out the region to drive growth as more people come online. The company is encouraging small to medium-sized enterprises (SMEs) across the Middle East and North Africa to establish an online presence and enable payment options on their websites.

The region's online payment industry is believed to be worth US$9 billion (Dh33.05bn), of which Paypal has a 5 per cent share. The company has previously stated it was looking to double its market share to 10 per cent within two years.

Since partnering with the local logistics company Aramex last November to support its "shop and ship" service, the company's client base has grown "high double digits", said Mr Ghanem.

PayPal is available in 11 key markets in the region. It plans to launch in Egypt and Lebanon in November. But the company is waiting for greater stability and improved internet infrastructure in places, such as Libya before it expands further.

Mr Ghanem is now expecting the Dubai office to be up and running by September.

Dubai Internet City has been shifting its focus from big-name global players to more local and regional SMEs, but the free zone has come under fire for being too slow and expensive for start-ups.

While Dubai is unlikely to lose its status as a regional hub for technology companies, some have been forced to downsize their presence because of rising costs.

The Jordanian mobile apps developer Info2cell is one such company.

"Dubai as a hub has been ideal and will continue to be so as there is no comparable alternative," said Bashar Dahabra, the founder and chief executive of Info2cell.

"Pricing is the only downside and they are still going up. We used to pay Dh90 per square foot, but that went up to Dh180 over 10 years. For it to double is not justified."