Mobi Direct Withdraws Its License From SBP To Set Up E-Commerce Payment Gateway

Mobi Direct, a company first in its category of PSP/PSO operator, has withdrawn its license from the State Bank of Pakistan. The company took a regressive move considering the persisting economic and cutting-edge market situation for setting up an E-commerce Payment Gateway. More operators will probably follow suit.

Mobi Direct Withdraws Payment Gateway License From SBP

For all those unaware, Mobi Direct (Pvt.) Limited assists and develops financial networks in rural economies with the help of a select group of professionals with expertise in diversified businesses. It is the first payment system operator (PSO)/payment service provider (PSP) authorized by the State Bank of Pakistan to establish an Electronic Payment Gateway (EPG) in Pakistan. The operator acquired in-principle approval from the banking regulatory body in 2016. Since then, it has not made any improvement in the next phase to get permission for the pilot launch of its services as an e-commerce gateway.

According to the Analysts, several reasons could have led the operator to surrender its plan of doing business. It includes the growing competition among market players, evolving technology trends in the financial sector, and fear of low returns on investment. In addition, the high paid-up capital requirement of Rs. 200 million is one of the biggest reasons behind PSO operators’ struggle to establish their businesses in Pakistan.

According to the State Bank of Pakistan (SBP), five companies are categorized as payment service providers or payment system operators working in Pakistan out of a total of twelve. Three of these operators have been approved for pilot operations. On the other hand, four others hold in-principle approval or licenses to establish their business in Pakistan. Seven operators have not even made any progress for the last eight to ten years. Moreover, neither the banking regulator nor they have withdrawn their licenses for not making any development within the given scope of work.