Home ›› 25 Oct 2021 ›› Front
The Fintech startup – iPay Systems Ltd – is unmistakably on the back foot in the wake of what the industry insiders say “amateurism” on the part of its entrepreneurs.
Launched in 2018 iPay became an apparent trailblazer with an aim to improve activities in finance, but within a span of just three years it ended up in a sinking venture.
According to sources, the much-hyped Fintech industry is now going through a severe financial crisis – a paradigm shift to its ceremonial emergence through a gala at Radisson Blu Water Garden where former finance minister Abul Maal Abdul Muhith graced the occasion as the chief guest.
The investors’ ineptness, lack of their foresight and proper investment plan as well as over the top expenditure are attributed to the reasons behind its complete fiasco.
iPay Systems Ltd had been counting loss since its inception when its venturers invested a Tk70 crore primarily.
A monopoly business of mobile financial service providers in the E-wallet market and noncooperation from banks are said to be other reasons for the present fragile condition of the venture.
Still in existence is the website of the company that reflects on its radiant past while most of its services are virtually shut, iPay officials said, seeking anonymity.
At the very outset, iPay garnered a huge response from various quarters as it signed deal with various organisations including banks, and had a bona fide workforce of about 300.
Even it sponsored the international cricket tournament hosted by the Bangladesh Cricket Board (BCB) – all now are just memories.
Being the first in kind, the Fintech enterprise obtained the central bank licence as a Payment Service Provider (PSP) to make digital payments for purchases, utility bills, taxes, tuition fees and fund transfer.
But its setback for financial operations began after 2019 and the raging pandemic drove a nail in its coffin finally. By the time the epidemic pushes up the growth of global Fintech companies, iPay turned upside down.
“We are in a bit of crisis due to the Covid-19 pandemic and now we need some investment,” iPay director and former chairman Shahidul Ahsan said.
“In the beginning, we injected Tk 70 crore to Tk 80 crore in iPay, but we did not understand how to run such a Fintech enterprise,” Shahidul admitted, saying a chunk of foreign investment will help it turn around.
An iPay office in name only
The enterprise appears to be lifeless as no official activities are noticed. The Business Post correspondent made a recent visit to the company office in Silver Tower (Level 12) at 52 Gulshan Avenue in the capital and came across the situation.
As the Fintech industry hit the market, it had around 300 officials which have now come down to 13 only, and amid the pandemic a large number of executives were laid off while an existing handful of them are not getting salaries regularly.
The Chief Executive Officer (CEO) Zakaria Swapan and Chairman Rezaul Hossain reportedly do not turn up at the office; they conduct official activities virtually, said iPay sources.
Over 3,500 businesses used iPay platform and it had around 7 lakh clients, of them around one lakh is still active.
Prime movers of iPay
Zakaria Swapan founded iPay in 2015 and was its CEO since its onset while Rezaul Hossain newly held the post of chairman. Rezaul is also the managing director of Goldstar Group, a garment sector Business Group.
Before Rezaul, former Mercantile Bank director Shahidul Ahsan became the chairman of iPay who was also the chairman of Ahsan Group.
Ratanpur Steel Re-Rolling Mills Ltd (RSRM) Managing Director Maksudur Rahman is also another investor of iPay.
CEO Zakaria Swapan told The Business Post that their services are open but the office remains closed due to the pandemic.
By acknowledging the issue of layoff, he said: “We have made our team smaller by cutting jobs during the pandemic as we don’t need so many staff right now.”
“The business of payment service providers is totally contingent on banks but we are hardly getting much cooperation from them which is one of many reasons behind the snail’s pace of iPay.”
As per the website of iPay Systems Ltd, former banker Mohammed Nurul Amin serves the Fintech company as its adviser, but actually, he is not with the company from March 2020.
Contacted, Mohammed Nurul Amin said: “I resigned from iPay in March last year but my picture is still there on their website which is not fair.”
“The company had been doing well till I was with them, but I cannot say why it nosedived.”
The central bank is very concerned about the present condition of iPay Systems Ltd.
According to a BB high-up, they are now issuing licence after a rigorous verification so that no other startup suffers the same fate as did the iPay.
Most banks now are coming up with their own apps or E-wallets to provide digital financial services to their customers, thus being another reason behind the poor business growth of iPay, opined the official.
Other payment service providers (PSP)
Like iPay Systems Ltd, D Money Bangladesh Ltd is another PSP operating business, however, it has yet to command customers’ attraction.
Recursion FinTech Ltd and Green & Red Technologies Ltd have gotten the central bank licence as PSPs but are yet to start their commercial operation.
The tech-based startup Pathao is in the pipeline to get the central bank licence as a payment service provider. Besides, Chaldal.com, an e-commerce platform, too opts to get the BB permission in this regard.
