It was recently discovered that Pakistani banks have unilaterally decided to ban processing wire transfers by leading international payment gateways and aggregators, without providing any sort of a justification for the move.
A report in the Finance Training Course stated that sometime last week, it found that some local banks have independently decided to stop processing 2Checkout – one of the largest payment gateway platforms on the web. The ban was also imposed on most payment aggregators, consolidators and other gateways including Skrill and Payoneer.
Reports have allegedly been pouring in about delayed and suspended payments. Despite there being no official announcement, informal updates claim aggregated transactions will not be processed by banks and that the proceeds will be wired back to 2Checkout and other payment gateways sometime later this week.
2Checkout has around 6,000-10,000 users in Pakistan running e-commerce stores using services like 2Checkout, Skrill and Payoneer; and between 15,000-20,000 freelance programmers, developers and household businesses use the popular platform.
According to the report, anywhere between $60 million to $200 million is wired into Pakistan via 2Checkout every year, as per an estimate based on 6,000-10,000 online store vendors (with an average annual revenue of between $10,000 and $20,000 per vendor).
It was discovered that the offending wire was received by the bank, but customers were later informed that their transactions would not be processed, and that the funds would be wired back to 2Checkout. A similar problem was faced by numerous vendors across the country. With time the number of cancelled, on hold, and suspended transactions, started to increase along with the number of banks joining in the ban.
Moreover, the ban has a significant impact on the e-commerce industry. One of the fallouts will be seen in the next 2Checkout cycle where the wires will land and will be tagged for cancellation or return. If estimates are correct, the combined impact of this action will be around $5-8 million.
Brand Pakistan, a destination for entrepreneurs, technology founders and angel investors, have built a $200-400 million dollar e-commerce industry that wires money to the country through official business channels. Where the finance ministry and the central bank are busy rolling out programs for bringing foreign exchange into Pakistan, facilitating exports; the banking sector has causally decided to return $200 million to the sender when the country is gripped in a balance of payments crisis, thereby burying a blooming export industry that employs thousands of people across the country.