What is the easiest way for companies to receive payments in Tanzania?
You are an entrepreneur, business or freelancer in Tanzania, you work for clients based abroad, how do they pay you? PayPal is the best way to receive payments in many countries. But not in Tanzania. Many businesses hope will this comes eventually, a few years back there was even a petition started by a group of entrepreneurs with over 5,000 signatures. There is simply no way to receive payments with PayPal in Tanzania as a business. That feature is blocked. In case a PayPal account is registered in Tanzania, you will only be able to send a payment but not receive one. If you are familiar with the text: “We’re sorry but PayPal users in this country aren’t eligible to receive money”, you know exactly what we’re talking about.
What is PayPal?
But what is PayPal exactly and what alternative is there? PayPal provides a wallet that holds PayPal balance. You can deposit money from your bank account, prepaid or credit card into your PayPal wallet to do e-commerce purchases for example. You can also receive money into your PayPal wallet from others such as friends and family and pay the money from your PayPal balance eventually out to your bank account, prepaid or credit card. PayPal, founded in the United States, has been active for over 20 years and had 254 million active users worldwide in 2018.
As a business you have the option to register a PayPal Business account, which is a wallet that allows you to receive payments from your customers online. Payments to this wallet to your business can be made through a checkout or payment link. The payment will reflect after hours and will appear in your accounts within a couple of weeks. The fee that PayPal charges for this is approx. 3%. After receiving the payment in your wallet you have the option to withdrawal the balance and pay out to your bank account.
As PayPal in Tanzania is not supported, the alternative is ClickPesa, which does support your business with receiving payments in Tanzania from your clients based abroad. Payments can be received from clients anywhere in the world by sending them a payment request via an e-invoice or payment link using your ClickPesa account. ClickPesa does not hold your money. Therefore, ClickPesa does not open an additional wallet for you as PayPal does. As a business you already have a bank or mobile money account, sometimes even more than one business account. Instead, you can connect your ClickPesa account straight to your existing bank accounts or mobile money accounts. This can be done within a couple of seconds.
After your client pays, ClickPesa makes sure you get paid out as soon as possible, usually within a couple of days, charging you a fraction of the cost PayPal charges you. ClickPesa also allows you to keep track if your client paid already, you don’t want to lose track of your payments of course.
PayPal and ClickPesa comparison
|Supported in Tanzania||No||Yes|
|Fees||approx. 3% + withdrawal fee||0,5%|
|Payments in your existing account||No||Yes|
|Payment reflect in your account||3-4 weeks||3-5 days|
|Local Customer Support||No||Yes|
What is ClickPesa?
ClickPesa is a payment service provider offering a set of payment services to companies based in Africa such as cross border payments, payment acceptance and bulk payments for companies through different channels in Africa. Receiving payments from abroad can be done with ClickPesa’s cross border payment service which facilitates faster, less expensive and transparent transactions to Tanzania and East Africa.