This issue is a serious disadvantage for you, considering that Clickbank is the No. 1 in digital products such as e-books and software, and Paypal is the most widely used payment processor. You can read all the ebooks and attend all the seminars you want, but without specific information on solving these key problems, you’re not going to get anywhere soon.

Without a Clickbank account you are losing a serious source of residual income. Some other popular affiliate networks like Commission Junction and LinkShare also have a rollercoaster situation with Malaysia. On last check they don’t accept Malaysian registrations, but even if they do it’s a risky option. I have had my account in CJ and LinkShare terminated twice without proper notice or clarification. The only reason I can think of (which was confirmed when I tried to sign-up again) is that they have removed Malaysia from the list of acceptable countries.

If you’re a Malaysian, you can register for a Paypal account and use it to make and receive payments, but you cannot withdraw the balance into your bank account. Don’t bother asking why—I had already asked the good old guys at Paypal countless times and I don’t think the situation is going to change anytime soon. Paypal is the most widely used payment solution in the world, and whether you like it or not you’re going to need them. You may easily find alternative credit card processors, but certain things like getting affiliate commissions quickly, selling on Ebay and paying for services over the Internet depends heavily on Paypal.

Here’s the problem: My research shows that although Malaysia may be a tiger in new world economics, but when it comes to international e-commerce, she’s a mongrel: unwanted and undesired. It boils down to three basic facts:

High rate of credit card fraud—Malaysia ranks among the top credit card fraud offenders in the world. In fact urban legend has it that several fraud devices and software programs were developed in Malaysia. Although I cannot verify that, the fact remains that Malaysia continues to be tagged as a “high credit risk” country.

A Third World country—Third World countries are generally treated with less confidence as compared to developed countries.

A Muslim country—Some sources claim that International companies like Clickbank are wary of Muslim countries.

Although you will never see this claim on the terms of service (TOS), it does clarify an otherwise unexplainable policy of not having any such country in their registration lists.

Take a short cut with my personal experience and the experience of many other Malaysian entrepreneurs—forget about Malaysia.

So how do you overcome the adversity? Although these services may work against you, the best way to overcome this problem is apparently to stop being a Malaysian and start being a Singaporean. There are many sources claiming to be able to set-up a U.S. bank account on your behalf, but in my opinion this is a risky strategy.

Here’s a better solution: become a “virtual” Singaporean.

After all, Singapore doesn’t fit any of the three negative disqualifiers mentioned above. They are a developed country, not ruled by a Muslim government and don’t have a dangerous fraud rate. I’m not talking about getting a Singaporean PR (Permanent Resident) or getting a Singaporean bride. You don’t have to go that far. All you need to do is set-up a virtual business presence in Singapore and re-direct certain business activities to the Lion City. I understand that this strategy may not be for everyone, but it has worked wonderfully for me.

Step 1: Get A Virtual Office And Address

If you have trustworthy relatives or friends in Singapore, you can just use their address and skip this part. If you don’t, then you need to pay for a virtual office with a Singaporean address. A virtual office is basically a service whereby you pay for a shared office address and other facilities. There are many services you can use, but I use Virtual Office.com.sg.

In my opinion they have the best package for Malaysians. Their service is divided into three option packages:

Economy Class (SGD10 / month)—This service is only offered to Singaporeans so you can forget about this.

Business Class (SGD20 / month)—This package should be more than enough to suit your purposes. You need to subscribe and pay up-front for one full year (about SGD510) and it will cover mail forwarding etc.

First Class (SGD70 / month)—If you can afford it, you can also go for the premium package. You will get a dedicated phone and fax number. You need to subscribe and pay up-front for one full year.
Once you have signed up and paid for your virtual office, you will be given a permanent address such as this:

32 Maxwell Road
#03-07 White House
Singapore 069115

This is a valid and legal address. Note that you don’t need to register your business in Singapore to have a Singaporean address. Now that you have this address, you can use it to register a new Clickbank account, as well as your CJ and LinkShare accounts for free.

You can also register for a Paypal Personal Account, and choose Singapore as your country. You may choose to list your “country of citizenship” as “Malaysia,” since this shouldn’t be much of an issue. You new Paypal account will have spending and receiving limits until you’ve verified it. You will not be able to withdraw money yet, or even see an option to add a bank account other than a US bank account. Don’t worry about this for now, since we need to get to this next important step first.

Step 2: Open A Singapore Bank Account

You will need a Singapore bank account to be able to withdraw money from your Paypal account. You will also need it to cash in any checks mailed to your virtual office. After several migraines, I found the perfect solution with DBS bank.

What you need is a DBS Savings Account and a DBS Debit Card. All you need to do is to visit one of their branches to set-up your bank account, showing your Malaysian NRIC (National Registration Identity Card) and/or passport. You also need SGD500 to open this type of account. However, after you’ve opened your account with DBS, you can withdraw that amount anytime using their ATM card. DBS has confirmed with me that you can use this ATM card to withdraw from any Maybank ATM machine in Malaysia, or any other ATM machine that accepts the PLUS / CIRRUS service.

In a nutshell here’s what you need to open a DBS account:

Your Passport / NRIC

$500 Singapore Dollars

The time to travel to Singapore
DBS Bank of Singapore also owns POSB bank, and I recommend that you visit their website for more information. For clarity, here’s the difference between a DBS Savings account and a POSB Savings Account, as confirmed by their customer service:

Function DBS Savings Account POSB Savings Account
Account type Savings (non-Singaporean) Savings (non-Singaporean)
Initial Deposit SGD500 SGD500
Statements Monthly statements mailed to your address Passbook only
Internet Banking Yes Yes
Debit Card Facility Yes Yes
Debit Card Charges SGD24 per year
(Waived if used more than 18 times in a year) SGD18 per year
(Waived if used more than 18 times in a year)

Make sure that you specifically request for a Debit Card when you open your DBS / POSB bank account. There are no charges other than the annual maintenance charges, and having this Debit Card is the key to your Paypal withdrawals. Your debit card should take 3-5 weeks to arrive. Meanwhile you can also activate your DBS / POSB Internet banking facility.

When your debit card arrives at your doorstep, then you can begin the final step.

Step 3: Verify Your Paypal Account & Add A Bank Account

So far, you already have a “Singaporean – Unverified” PayPal Personal Account. You can verify your account by adding your DBS Debit Card into the list of cards in your Paypal account, and allow them to charge USD1.00 to your card. On your card’s statement, you will see a verification code consisting of four special characters issued by Paypal for this charge. Enter the special code into the verification screen and your Paypal account will be verified.

After your Paypal account is verified, you will see the option to add a Singapore bank account. Enter the details of your DBS bank account and verify it. Now you can transfer your Paypal balance into your DBS account, and either wire transfer the money into your Malaysian bank account using their Internet banking facility or withdraw using your DBS / POSB debit card. You can also transfer money into your debit card and use it for online and offline payments and purchases.

Step 4: Take Precautions

By now, you have already overcome three major obstacles to e-commerce in Malaysia. What’s left is to observe some precautions to ensure that your business doesn’t face unexpected problems and setbacks.

The major factor here is Paypal, who has a long, ugly history of freezing and terminating accounts without prior notice or proper clarification. In fact, most Internet entrepreneurs have faced problems with their Paypal account at one time or another. I recommend that you read their TOS (Terms of Service).

Here are the three big reasons why your Paypal account may be frozen or terminated:

Involvement in MLM schemes—If you used Paypal to receive or make payments for an MLM program, you account will be suspended. In fact, even selling e-books with the words “MLM” or “network marketing” in them can get your account suspended. There is no appeal for this type of offense and you will not be able to withdraw your balance for 180 days. You will also be unable to use this account to make or receive payments.

A sudden increase in activity—If your Paypal account is usually inactive and you suddenly start receiving a lot of money into it, it may be temporarily frozen. Contacting Paypal and providing some verification can solve this type of dispute.

Excessive chargeback—If you have multiple charge backs within a very short period of time, Paypal may check your account for fraudulent activities.
For more information on the dangers of using Paypal, see this site and read the complaints and stories submitted by users. The moral of the story is this: never leave money in your Paypal account. Withdraw frequently to your DBS / POSB bank, and transfer that to your Malaysian bank account. This simple protection measure can go a long way to ensure that your cash flow remains uninterrupted, and makes overcoming disaster an easier process.

Make sure you also read up as much as possible on Internet banking and online security, especially on the topic of "phishing” scams. Phishing usually involves spoofing emails to make them look like they are sent by Paypal, when in fact it’s send by some unscrupulous criminal trying to get access to your Paypal login and password. Never click on any email link to login to your Paypal account, since Paypal officials state that they will never ask you to do so.

Conclusion

This is just one strategy to overcome the obstacles presented by Paypal and Clickbank if you live in Malaysia. Although there may be other ways, including opening a US bank account, I personally feel safer with this arrangement. However, feel free to explore other options as well. The secret is to make sure whatever method you choose works to improve your cash flow, not against it. It should be as transparent as possible to avoid unexpected setbacks and unwanted problems.

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Gobala Krishnan in a home based entrepreneur from Kuala Lumpur, Malaysia. You can contact him at http://www.gobalakrishnan.com