PayPal teams with South Africa's First National

PayPal has started to offer international online banking to customers of South Africa's First National Bank, with plans under way to roll out services to many other countries on the continent.

PayPal's partnership with the South African bank is the company's first such relationship in Africa and marks its first big step in promoting and expanding e-commerce in the region.

The deal between PayPal and First National Bank means that the bank's customers in South Africa can now access PayPal users around the world, making and receiving payments for products online and eliminating the risk of exposing bank account numbers. Customers are also allowed to top up or withdraw funds from First National Bank accounts via a registered PayPal account, provided the two accounts are linked.

First National Bank is owned by FirstRand, South Africa's second-largest banking group, which is looking for expansion opportunities in Nigeria and already has operations in Namibia, Zambia, Mozambique and Lesotho.

It is expected that PayPal will quickly roll out services to the countries where First National Bank already has a presence. PayPal's regional director for Israel and South Africa, Oded Zehavi, said the company has plans to spread across Africa. Zehavi said PayPal customers in South Africa can send money using their credit cards with PayPal in many African countries, but can only top up or withdraw from their First National Bank in South Africa.

The service is also expected to improve eBay's profile in South Africa and later in many other African countries, as PayPal is the primary means of payment on the site. EBay, a vast commerce marketplace where buyers and sellers connect, has long made efforts to ensure that brands sold on the site are legitimate and that posts from sellers peddling counterfeit goods are quickly removed.

Many Africans have been complaining about the unavailability of PayPal services in Africa. South Africa is being used as a test ground for other markets.