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.
Foster Payments and EasyPayWay is the subsidiary of Dotlines. The Bangladesh Financial Intelligence Unit (BFIU) raised objection to the issuance of license to these two firms in February this year. The BFIU told the police’s Criminal Investigation Department (CID) in September this year Dotlines chairman Mahbubul Matin owns several companies in Singapore, Malaysia and UK and he is involved with money laundering.
After that, the central bank seized the bank accounts of Foster Payments. Since then, there has been some changes in the boards of the Foster Payments and the EasyPayWay though Dotlines still holds the majority shares.
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.”
The Bangladesh office of Dotlines is located at Uday Tower in the capital’s Gulshan. Dotlines’s subsidiary Carnival Internet provides internet services, Carnival Assure insurance services and Sohoj provides payment transfer service for migrants.
Dotlines chairman Mahbubul Matin lives in Malaysia and also has businesses in Singapore.
*This report appeared in the print and online edition of Prothom Alo and has been rewritten in English by Hasanul Banna