KARACHI: Abid Qamar, the chief spokesperson of the State Bank of Pakistan (SBP), addressed the issue of users paying Google in a statement to Business Recorder on Tuesday. The SBP is actively engaging with the sector to find a resolution to the problem.
This development comes in the wake of recent reports that certain payments to Google were suspended, leading to concerns that Pakistani consumers would lose access to Play Store services starting December 1. However, the SBP refuted these reports, clarifying that it had removed banks and telcos from its list of approved parties for such transfers due to “the violation of foreign exchange regulations.”
The SBP explained that during off-site reviews, it was discovered that telcos were sending the majority of funds for video games and entertainment content, which customers purchased using airtime, under Direct Carrier Billing (DCB). Moreover, the mechanism was being used to remit funds for IT-related services for the telcos’ own use.
As a result, the telcos effectively acted as payment aggregators or intermediaries, facilitating their users’ service purchases. The SBP’s response was to remove the designation of banks and telecoms for such payments in compliance with foreign exchange laws. However, telecoms have been instructed to resubmit their requests through their banks to support legal IT-related payments.
The SBP clarified that if any organization, including a telco, wants to serve as an intermediary or payment aggregator involving foreign currency outflow, they must separately seek special permission from the central bank through their bank to offer such services.
Abid Qamar affirmed that the SBP is actively collaborating with the industry to find a solution to this issue.
In recent months, the SBP has intensified scrutiny of transactions resulting in foreign currency outflow. It has set a yearly cap of $30,000 per user for credit/debit card transactions and limited the foreign exchange threshold for visitors aged 18 and older to $5,000 each time. For travelers under 18, the cap per visit is set at $2,500. Additionally, the yearly limits for adults and minors to withdraw foreign currency from the country have been set at $30,000 and $15,000, respectively, as of the calendar year 2023.
This warning comes as data from last week showed that central banks’ holdings of foreign exchange reserves dropped to $7.8 billion, sufficient to support only 1.5 months’ worth of imports. As Pakistan grapples with a financial crisis exacerbated by a devastating flood calamity, policymakers are seeking additional funding. Discussions are ongoing between the IMF and the authorities in Islamabad for the 9th review of the Extended Fund Facility.