State Bank of Pakistan (SBP) has cleared the air regarding holding off payments to some foreign tech companies, including Google after news started circulating on social media about suspension of Google Play Store in Pakistan. In a press release, SBP has denied these rumors and called them “misleading.”
“Recent news circulating in some sections of the media that certain payments to Google are stuck at State Bank of Pakistan, are baseless and misleading.” the central bank stated, adding that it strongly refutes all such assertions. “The fact is that in order to facilitate the domestic entities, SBP specified certain Information Technology (IT) related services, which such entities can acquire from aboard for their own use and make foreign exchange payments there against up to USD 100,000 per invoice.” it added.
According to SBP, these services include, Satellite Transponder, International Bandwidth / Internet / Private Line Services, Software License / Maintenance / Support, and service to use electronic media and databases. Furthermore, the banking regulator added that entities desirous of utilizing this option designate a bank, which is approved by SBP one time and payments in the future can be processed without any regulator approval.
Talking about the matter at hand, the SBP said that it was observed that in addition to utilizing the aforesaid mechanism remit funds for IT related services for their own use, Telcos were remitting bulk of the funds for video gaming, entertainment content, etc. purchased by their customers using airtime, under Direct Carrier Billing (DCB).
Explaining Direct Carrier Billing (DCB), which is an online mobile payment method, which allows users to make purchases by charging payments to their mobile phone carrier bill, SBP explained that said Telcos were allowing their customers to purchase above mentioned products through airtime and then remitting funds abroad reflecting such transactions as payments for acquisition of IT related services.
“Thus, in effect the Telcos were acting as intermediaries/ payment aggregators by facilitating acquisition of services by their subscribers.” the central bank stated. “Therefore, in view of the violation of foreign exchange regulations, SBP revoked the designation of banks of Telcos for such payments.”
However, it added that said move isn’t permanent as in order to facilitate legitimate IT related payments, Telcos have been advised through their banks to resubmit their requests. “
If any entity, including a telco, intends to operate as an intermediary/payment aggregator and such arrangement involves outflow of foreign exchange, it has to approach SBP, separately through its bank, for seeking special permission for providing such services under the Foreign Exchange Regulation Act, 1947.” the SBP concluded.
News Regarding Suspension of Google Play Store Services in Pakistan
Earlier, it was being reported by multiple sources that Google Play Store was shutting down in Pakistan as Google was suspending Google Play Services in the country after SBP was withholding payments for Direct Carrier Billing (DCB) to foreign tech companies.
However, the news was false to begin with and we did post an explanation on the matter that Google Play Services and the Google Play Store itself will continue to work normally, except Direct Carrier Billing (DCB), which will be unavailable and instead people will need to use Debit or Credit Cards for buying apps and doing in-app purchases.