Suspension of DCB payments to Google Play: users, telecom companies at receiving end

KARACHI: The State Bank of Pakistan (SBP) is engaged with the industry on the issue of users’ payments to Google, and it will be resolved, chief spokesperson for the central bank, Abid Qamar told Business Recorder on Tuesday.

The statement comes after it was widely reported last week that certain payments to Google have been suspended and Pakistani users would be deprived of Play Store services from December 1. However, the reports were countered by the SBP that said it revoked the designation of banks of telcos for such payments in “view of the violation of foreign exchange regulations”.

“During recent off-site reviews, it was observed that in addition to utilising the mechanism to 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),” the SBP said in a statement on Saturday.

Payments to Google: SBP rejects allegations

The SBP added that telcos were allowing their customers to purchase these 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. Therefore, in view of the violation of foreign exchange regulations, SBP revoked the designation of banks of telcos for such payments. However, to facilitate their legitimate IT-related payments, telcos have been advised, through their banks, to resubmit their requests.”

It said if an entity, including a telco, intends to operate as an intermediary/ payment aggregator and such arrangement involves outflow of foreign exchange, it has to approach the central bank, separately through its bank, for seeking special permission for providing such services.

On Tuesday, Qamar said the SBP is engaged with the industry on this issue, and it will be resolved.

In recent months, the SBP has increased vigilance on transactions that result in outflow of foreign currency. It imposed an annual, per-user limit of $30,000 for credit/ debit card transactions, and also restricted the foreign currency threshold for travellers (aged 18 and above) at $5,000 per visit.

Suspension of DCB payments to Google Play: users, telecom companies at receiving end

In the case of travelers under the age of 18, the limit per visit has been set at $2,500. Additionally, from the calendar year 2023, the annual ceiling to take out foreign currency from the country for adults and minors has been set at $30,000 and $15,000, respectively.

The caution comes as central-bank-held
foreign exchange reserves dropped to $7.8 billion, according to data last week, and barely enough to cover 1.5 months of imports.

Pakistan is currently in the midst of a financial crunch with policymakers running from pillar to post to secure additional funds for a country reeling from flood disaster. Authorities in Islamabad and the International Monetary Fund (IMF) are also engaged in discussions over the 9th review of the Extended Fund Facility.