Earlier this month at the World Economic Forum Annual meeting in Davos, MasterCard announced a strategic collaboration with Pakistan’s National Database and Registration Authority (NADRA).
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However, the State Bank of Pakistan decided to look in to the matter expressing concern over the fact that NADRA’s decision to enter into a strategic agreement with MasterCard has not only raised the stakes, but that the database authority has preferred a company that does not have its servers in Pakistan.
According to sources in the SBP and NADRA, they also did not take the requisite regulatory approvals before venturing into an area that does not fall in its jurisdiction.
MasterCard said that,
“The move will allow Pakistani citizens to carry out financial transactions and receive government disbursements by utilizing the unique 13-digit identification number of their identity card.”
However, NADRA does not have the mandate to render payment services and venturing into any such area would require prior approval of the central bank. Many security concerns were raised including that payment processing centres or the servers of Mastercard are in foreign jurisdictions, some not friendly to Pakistan.
NADRA hosts sensitive data on the total population, and according to insiders there are roughly 10,000 attacks per month, even though the NADRA officials insist that MasterCard would not have access to their secure database.
According to the Interior Minister Chaudhry Nisar Ali Khan,
“The agreement has been signed in the absence of a written permission from the government, neither were the stakeholders consulted nor sensitive security matters kept in view.”
The Interior Minister has asked NADRA to explain the extent of access the foreign company would have to NADRA’s database and the law this came under. If the national database manages to put the minister’s concerns to rest, the service could be formally launched over the next six months. However, until then Chaudhry Nisar has ordered the MoU between NADRA and MasterCard to be suspended.
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