Pathao to get BB licence as payment service provider

The tech-based startup Pathao that provides services in ridesharing, food delivery, courier and e-commerce is going to get the Bangladesh Bank licence as a Payment Service Provider (PSP).

The name of the Payment Service Provider of the fast-growing startup is “Pathao Pay”.

Besides, Chaldal.com, an e-commerce platform in the country, opts to get the central bank permission as a Payment Service Provider too.

“The central bank has recently provided no objection certificate (NOC) to Pathao in this regard,” Bangladesh Bank Executive Director and spokesperson Md Serajul Islam told The Business Post.

In this one year, the central bank will observe all the activities of the payment service platform and, if satisfied, only then the final licence will be provided, added Serajul.

When a business entity applies to the central bank for permission as PSP and Payment Service Operator (PSO), it has to submit its business concept and related documents to the Payment System Department of the Bangladesh Bank.

As per the BB regulation, the central bank issues the NOC if it is satisfied after reviewing related documents and business certificates of the entity.

“A final approval is available only if the business organisation implements its technical infrastructure as a PSP or PSO,” according to the rule.

The fastest growing tech startup in Bangladesh was founded in 2015 by Hussain M Elius and Shifat Adnan and Fahim Saleh with the dream of making lives better.

Contacted, Pathao Chief Executive Officer Hussain M Elius told The Business Post he is not interested in talking about the issue right now.

However, it is learned that the company is going to launch Pathao Pay to provide its own service to its large scale of customers.

E-commerce platform Chaldal.com has also applied to the BB to get approval for PSP, another high official of the Bangladesh Bank, said, seeking anonymity.

The Business Post Correspondent tried to reach Chaldal founder and chief operating officer Zia Ashraf over phone but he did not respond to the phone call.

The BB official said many PSPs who have already got licence have yet to start their activities.

“So we will now award them licences following a rigorous verification,” he added.

Payment service providers give payments or process payment directly to customers and settle their transactions through a scheduled bank or financial institution such as E-wallet, Mobile Wallet, etc.

Besides, payment service operators operate a settlement system for payment activities between/among participants of which the principal participant must be a scheduled bank or financial institution such as payment gateway, payment aggregator, etc.

A number of four entities -- iPay systems Ltd, D Money Bangladesh Ltd, Recursion Fintech Ltd and Green & Red Technologies Ltd -- were issued the licence to operate as payment service provider and five other entities -- IT Consultants, SSL Commerz, ShurjoMukhi, Progoti Systems Ltd and Portonics Ltd -- were allowed to work as payment system operator.

In March 2020, the central bank asked all scheduled banks not to provide any banking services or transactions facility to unlicensed payment service providers (PSP) and payment system operators (PSO) as a number of illegal PSP and PSO were operating their business in the market.