BB goes tough against foul payment gateways

The Bangladesh Bank has begun to suspend operation of rogue online payment gateways as half a dozen such payment services are operating their business without the central bank approval.

As part of the move, the central bank recently stopped operation of Paysenz Limited, an illegal online payment gateway, operating business since 2019.

The central bank on October 19 sent a letter to Paysenz, asking it to close down operation.

A high official of the central bank said the online payment service provider applied to the central bank for licence, but its activities were not satisfactory.

“We will phase out all illicit e-payment gateways in the market but those that would be able to fulfill the central bank requirements, will get licence,” the BB official said, seeking anonymity.

According to industry insiders, a number of online payment systems are doing business without the central bank licence, which sparked criticism while a dozen of controversial e-commerce platforms came under the government scanner.

They said the central bank found some rogue online payment service providers involved in fraudulent activities, which prompted the BB to go for such initiative.

In response to the demand of clients and merchants, several Payment system Operators (PSOs) started operation in 2010.

Then the central bank updated the ‘Payment and Settlement System Regulation’ in 2014. Under the regulation, the central bank had given PSO licence to SSL commerz Ltd for the first time in 2016.

Now five legal online payment gateways are operating in the market. The five are SSL Commerz Ltd; IT Consultants Ltd; ShurjoMukhi Ltd; Progoti Systems Ltd and Portonics Limited.

Besides, seven banks are involved in the payment gateway services too.

They are The City Bank, Eastern Bank, Dutch-Bangla Bank, BRAC, Southeast, Mutual Trust Bank and UCBL.

Illegal online payment gateway in the market

The banking regulator, however, found five online payment gateways, which have no approval.

The five are soft tech innovation Ltd’s “aamarPay”, The Codero Limited’s “Easypayway.com”, Walletmix, Foster and Paysenz Limited.

As per the BB official, these payment gateways have already applied to the central bank for approval.

“We are scrutinizing their operation. If they are not found eligible, their operation will be cancelled,” he added.

Recently, the Bangladesh Financial Intelligence Unit directed all scheduled banks to freeze bank accounts of the illegal payment gateway namely Foster.

Foster is the payment gateway of controversial e-commerce platform Qcoom.

Contacted, Paysenz Limited Managing Director Masud Hasan told The Business Post, “Our operation was put on hold from October 31 this year as the central bank instructed us to do so.”

“We provided the documents relating to our activities to the central bank. However, we do not know why our activities have been suspended.”

In March last year, the Bangladesh Bank asked all scheduled banks not to provide any banking services or transaction facility to unlicenced payment service providers (PSP) and payment system operators (PSO).