The State Bank of Pakistan (SBP) refuted “inaccurate and misleading” media allegations that it had withheld payments to Google.
The SBP statement follows media claims that Google Play Store services will no longer be accessible to Pakistani consumers beginning next month due to the suspension of the direct carrier billing (DCB) mechanism by the SBP.
The Pakistan Telecom Authority (PTA), the Service of Data Innovation and Telecom, and four cell mobile operators (CMOs) have repeatedly written a joint letter to the SBP requesting that it reconsider its decision to abandon the DCB system for the payment of the dollar charge in light of Pakistan’s ongoing liquidity crisis.
In a statement released on Saturday, the central bank said, “In order to facilitate domestic entities, the SBP has specified certain Information Technology (IT)-related services that domestic entities can acquire from abroad for their own use and make foreign exchange payments for up to USD 100,000 per invoice. These services include Satellite Transponder, International Bandwidth/Internet/Private Line Services, Software License/Maintenance/Support, and the utilisation of electronic media and databases.
1/2 Recent news in some sections of media about stopping certain payments to Google by #SBP, are baseless and misleading. SBP strongly refutes all such assertions. See PR: https://t.co/OOnQBrQVoX pic.twitter.com/Rx11bobDLB
— SBP (@StateBank_Pak) November 26, 2022
Entities desiring to use this option must choose a bank, which is approved once by the SBP. It was stated that, following designation, such payments could be routed through the authorised bank without further regulatory permission.
During recent off-site audits, it was discovered that in addition to using the aforementioned mechanism to remit funds for IT-related services for their own use, telcos were also remitting the majority of funds for video gaming, entertainment content, etc. purchased by their customers using airtime, under Direct Carrier Billing (DCB). DCB is a mobile payment system that allows customers to charge purchases to their mobile phone carrier account.
It was stated that the telecommunications companies were allowing their customers to purchase the aforementioned products with airtime and then remitting funds abroad as payments for the acquisition of IT-related services.
Thus, the telcos acted as intermediaries/payment aggregators by enabling their subscribers’ procurement of services. In light of the infringement of foreign exchange regulations, the SBP terminated the designation of telco banks for such payments,” the statement continued.
The SBP explained that in order to facilitate the telcos’ legitimate IT-related payments, their banks have been instructed to resubmit their requests.
It stated that if any entity, including a telecommunications company, intended to operate as an intermediary or payment aggregator and such an arrangement involved the outflow of foreign exchange, it must separately approach the SBP through its bank to seek special permission to provide such services under the Foreign Exchange Regulation Act of 1947.