ISLAMABAD: Google on Monday announced that due to local requirements, users in Pakistan would be able to make purchases on the Play Store via credit or debit cards only with effect from December 1, 2022. “Google Play will be accessible in Pakistan. However, the availability of payment change over time.
From December 1, 2022, due to local requirements, users in Pakistan will only be able to make Play Store purchases via credit or debit card until other payment methods are available, . The State Bank of Pakistan canceled Direct Carrier Billing (DCB) for mobile operators, leaving the outstanding amount at $34 million. The Ministry of Information Technology and Telecommunication, Pakistan Telecommunication Authority (PTA), and four mobile operators have written a joint letter to the State Bank of Pakistan.
In his letter to Finance Minister Ishaq Dar, Minister for Information Technology and Telecommunication Syed Amin Ul Haque said that IT-related payments, including purchases of mobile applications and subscription services, below SBP 100,000 approved by the State Bank of Pakistan (SBP) through designated commercial banks. However, in September 2022, SBP removed the IT designation of banks for making IT-related payments on behalf of a telecom operator/mobile operator. “This recall has restricted telecom operators from paying global IT platforms such as Google, YouTube, Meta, and Spotify. For carrier-facilitated digital services and the associated customer payment process referred to as Direct Carrier Billing, a standard mechanism offered by Cellular Mobile. Operators (CMOs) around the world with significant tax value.“
The minister further said that last year mobile operators in Pakistan contributed 5.3 billion rupees to the exchequer by offering these services. It warned that “all the major players like Google, Amazon, and Meta are affected due to non-payment, and most likely, they will stop providing their services in Pakistan.” “Recently, Google has issued a notice to suspend the DCB services of mobile operators until all outstanding payments are settled. Notices have been issued to Jazz and Ufone (which are attached),” he said, adding that their suspension could lead to severe political chaos and adversely affect the country’s investment reputation with negative consequences for digital trade, IT exports and e-learning with significant losses for the state treasury as well.
He sought the Finance Minister’s attention and support to withdraw the DCB’s withdrawal of IT designations of respective banks authorized for IT-related transfers on behalf of telecom operators and ensure timely pending payments to global digital platforms.
Meanwhile, the SBP said in a statement that during recent off-site inspections, it was observed that apart from using the mechanism to transfer funds for IT-related services for their use, Telcos diverted most of the funds to video games. , entertainment content, etc., bought by their customers using airtime under DCB. DCB is generally an online mobile payment method that allows users to make purchases by charging payments to a mobile operator’s account. Telcos allowed their customers to purchase these products through airtime and then transfer funds abroad, reflecting such transactions as payments for purchasing IT-related services. Thus, they Telcoseffectively acted as payment intermediaries/aggregators, making it easier for their subscribers to obtain services. Therefore, SBP canceled the bank designation of Telcos for such payments because of a violation of foreign exchange regulations. However, their banks have advised Telcos to resubmit their claim to facilitate their legitimate IT-related payments. Suppose any entity, including a telecommunications company, intends to act as a payment intermediary/aggregator and such arrangement involves the outflow of foreign exchange. In that case, it must approach the SBP, separately through its bank, for special permission to provide such services within the foreign exchange market. Regulation Act, 1947.
