Careem Payment Solutions, an affiliate of the popular ride-hailing service Careem, has withdrawn its application for an Electronic Money Institution (EMI) license from the State Bank of Pakistan (SBP). This decision follows in the footsteps of UK-based Checkout Limited, which also abandoned its plans after receiving In-Principle Approval from the banking regulator.
A spokesperson for Careem explained, “We are withdrawing our application for the In-Principle Approval of an Electronic Money Institution license in Pakistan as we focus on growing our ride-hailing platform in the country. We remain committed to simplifying the lives of millions of Pakistanis by ensuring that our customers have access to safe, affordable, and reliable transportation, and our Captains can access the most flexible earning opportunities. We are also working with licensed partners to pilot simplified financial services on the Careem app, such as remittances into Pakistan from the UAE.”
The decision to retract its plan to become a fintech operator may be attributed to the current economic situation in the country, as well as the escalating competition in the digital banking and financial systems sector.
Careem Payment Solutions is closely associated with Careem, a pioneering ride-hailing service in Pakistan with an extensive network of vehicles and customers. The company boasts more than 9 million customers, 800,000 Captains (drivers), and 3,000 merchants who were set to access financial services through the same app.
In March 2022, Careem announced a $50 million investment following its entry into the fintech ecosystem. The company had ambitious plans to provide a range of services, including bill payments (utilities, government fees, and education fees), peer-to-peer (P2P) transfers, wallet cash-outs, payment cards, and international remittance services. Additionally, it aimed to offer services enabling customers and merchants to make and accept online or offline payments.
Earlier in the same year, Careem suspended its food delivery business in Pakistan to consolidate its ride-hailing operations and shift its focus towards financial services.
The SBP had initially listed 12 EMI/fintech operators as legal entities. Among these, four companies ceased their operations, including NayaPay, Finja, SadaTech, and CEMPECC. Three operators were granted permission for pilot operations: Wemsol, Akhtar Fuiou, and EP Systems. Hubpay and YAP Pakistan received in-principle approvals. The SBP also suspended the initial license of TAG Innovation. Furthermore, Checkout and Careem Payment Solutions have now withdrawn their license applications.
Careem Payment Solutions’ decision to prioritize its ride-hailing platform over fintech operations underscores the competitive landscape of the financial services sector in Pakistan.
