10 out of 15 payment gateways operate without approval
Several payment services operators (PSOs) started operation in Bangladesh to meet the demand of customers and merchants.
The Bangladesh Bank updated the Payment and Settlement System Regulations in 2014.
SSLCOMMERZ received the first license under the regulation in 2016 and four more PSOs were approved later.
At least 10 other PSOs are also providing services without approval. Foster Payments is one of the gateways where money of the several e-commerce platforms including Qcoom remains stuck.
Speaking to Prothom Alo, Bangladesh Bank executive director and spokesperson Serajul Islam said the central bank has no control over the PSOs operating without approval. It is the responsibility of the commerce ministry and the law enforcement agencies to look into them, he added.
PSOs work as the medium of online transactions for bank cards, internet banking and mobile financial services (MFSs). Various universities, hospitals, hotels, super shops, retailers and wholesalers conduct transactions through PSOs.
To provide these services, PSOs have to sign agreements with banks and mobile banking service providing organisations. They have to maintain relations with service providing organisations or sellers so that bank clients can make payments through bank accounts, cards or mobile banking after purchasing commodities or taking services. As many agreements they make, so much profit they make.
Sources said Bangladesh Bank sent a letter to banks, financial institutions and MFSs in 2019 instructing the later to cut ties with PSOs after the central bank started the approval process.
Many PSOs applied for license by then. Meantime, transactions through PSOs were accelerated due to boom in online sale and bill payment amid the coronavirus pandemic. Since business of PSOs expanded, Bangladesh Bank followed a slow pace policy fearing a slump in digital transaction.
If a firm sells a product or a service for Tk 100 and the transaction is usually made through a card, the frim receives Tk 98. The bank receives a major portion of the remaining Tk 2 and the PSOs take the rest.
Similarly, business firms selling products or providing services receive a bit less amount than that of the bank, if the transaction is made through MFSs including bKash, Rocket and Nagad.
Besides, seven banks provide service like PSOs along with their card services. They are The City Bank, Eastern Bank, Dutch-Bangla Bank, BRAC Bank, Southeast Bank, Mutual Trust Bank and UCBL.
These banks received card transaction of other banks through point of sales and QR code. On top that, bKash, Rocket and Nagad now work as direct mood of transaction.
Currently, there are five PSOs operating with license – IT Consultants, SSLCommerz, shurjoMukhi Limited, Progoti Systems and Portonics Limited. Of them, SSLCOMMERZE accounts for 80 per cent of transaction.
Foster Payments, aamarPay, EasyPayWay, Pay Space and Wallet Mix applied for license to the central bank. Several other PSOs including BD Smart Pay, BTT Pay, PortWallet and 2Checkout are providing services.
The Bangladesh Financial Intelligence Unit (BFIU) raised objection to the issuance of licence to Foster Payments and EasyPayWay in February this year.
EasyPayWay chief of business Zayed Rana told Prothom Alo on Sunday, “We have been doing business since 2011 and applied for license in 2016. Finally, the license was not issued but we have been updating the central bank regularly.”