Due to national regulations, users in Pakistan will be allowed to make Play Store purchases using credit or debit cards starting on December 1st, according to the global tech giant.
“All users in Pakistan can access Google Play now and in the future. The range of accepted payment methods could, however, alter over time. Users in Pakistan will only be able to make Play Store purchases with credit or debit cards starting on December 1, 2022, according to local regulations, a Google spokesperson announced.
The State Bank of Pakistan canceled the direct carrier billing (DCB) for mobile carriers, bringing the stuck-up overdue money to $34 million. After this, the Ministry of Information Technology and Telecom, the Pakistan Telecommunication Authority (PTA), and four mobile operators wrote to the central bank.
Amin Ul Haque, Minister of Information Technology and Telecom, stated in a letter to Finance Minister Ishaq Dar that SBP authorized payments for IT-related services, like mobile app purchases and subscription services, under $100,000 when made through certified commercial banks.
SBP, however, removed banks’ designation to handle payments for IT-related services on behalf of telecom operators and cellular mobile operators in September 2022.
According to the statement, “This revocation has limited the telecom operators to paying global IT platforms like Google, YouTube, Meta, and Spotify, etc. for the operator-facilitated digital services and related customer payment process referred to as Direct Carrier Billing, which is a standard mechanism offered by Cellular Mobile Operators (CMO) in the world with significant tax value.”
The minister added that while providing these services, mobile carriers in Pakistan gave the national budget a contribution of almost Rs5.3 billion in the previous year. According to the statement, “all the main players, including Google, Amazon, and Meta, are affected by non-payment and are most likely to stop providing their services in Pakistan.”
“Recently, Google has sent notifications to mobile providers instructing them to cease DCB services until all past-due balances are satisfied. The letters were sent to Jazz and Ufone (which are attached),” he said, adding that their suspension might cause serious political unrest, harm the nation’s reputation as a place to invest, and have a significant negative impact on e-learning, digital commerce, and IT exports.
He sought the finance minister’s help and attention in order to stop the DCB from revoking the authorization of specific banks to send money for IT-related remittances on behalf of telecom operators and to ensure that outstanding payments to international digital platforms are made on time.
According to the SBP, recent off-site reviews revealed that Telcos were utilizing the DCB mechanism to send money for video games and other entertainment items that their consumers had purchased with airtime in addition to using it to send money for IT-related services for their own purposes.
DCB is generally an online mobile payment method, which allows users to make purchases by charging payments to their mobile phone carrier bill. The Telcos were allowing their customers to purchase these products through airtime and then remit funds abroad reflecting such transactions as payments for the acquisition of IT-related services. Thus, in effect, the Telcos acted as intermediaries/ payment aggregators by facilitating the acquisition of services by their subscribers.
Therefore, in view of the violation of foreign exchange regulations, the central bank revoked the designation of banks of Telcos for such payments. However, to facilitate their legitimate IT-related payments, Telcos have been advised through their banks to resubmit their requests. If any entity, including a Telco, intends to operate as an intermediary/payment aggregator and such arrangement involves the outflow of foreign exchange, it has to approach SBP, separately through its bank, for seeking special permission for providing such services under the Foreign Exchange Regulation Act, 1947.