Facing a growing liquidity shortage as foreign exchange reserves continue to fall, Pakistan’s central bank has reportedly suspended the direct carrier billing (DCB) mechanism, blocking payment of millions of dollars, which was to be routed through telecom companies to international service providers, to Google and Apple.
The DCB is an online mobile payment method that allows users to make purchases by charging payments to their mobile phone carrier bill.
How does the development affect users in Pakistan?
Customers in Pakistan using mobile payments as the mechanism to purchase apps on Google Play Store and Apple's App Store may face hindrances as the international companies move to block services, industry experts told Business Recorder.
Parvez Iftikhar, an international consultant on Telecom Policy and Regulation, said that subscribers of any telecom operator can purchase apps, using mobile balance, through the DCB.
“Due to dollar shortage, the State Bank of Pakistan (SBP) has imposed a number of restrictions to prevent dollar outflow. DCB as of now stands suspended,” he said.
Some telecom companies have partnerships for Google App store payments where they could deduct the payment to buy an app through the balance available in a mobile account, informed the ICT expert.
“Such payments have been stopped temporarily,” he said. “Users can continue buying apps with credit and debit cards.
“However, Google Play services will remain available, and are not being removed in Pakistan,” said Iftikhar.
The IT expert informed that Google Play Store is the most used platform for app purchase due to the high number of Android mobile phones in Pakistan. “Google Play Store would be the most impacted,” he said.
The expert explained that the shutdown of app payment would affect telecom operators as well amid a decline in data consumption, which is an essential component of offerings by telecom companies.
“This will impact their traffic, and may stagnate growth in data usage.
“Moreover, the suspension of services could also hamper the revenues of Pakistani app developers as well. It has far-reaching implications."
However, Iftikhar was optimistic that the issue would be resolved soon since the amount payable (around $34 million) is not much. "It seems like a temporary development," he said.
The development comes after it was reported that the Pakistan Telecommunication Authority (PTA), the Ministry of Information Technology and Telecommunication, and four cellular mobile operators (CMOs) have written a letter to the SBP on Friday, asking it to reconsider its decision of revoking the DCB mechanism.
Federal Minister for Information and Technology Amin ul Haque expressed concern over the SBP's suspension of payment to Google, and in a letter urged the Federal Minister for Finance Ishaq Dar to resolve the issue at the earliest.
The development is in contrast to recent reports that a Google team would be visiting Islamabad next month to commence operations in Pakistan.
“A delegation of Google will visit Pakistan on December 11 to start operations,” said Pakistan Muslim League-Nawaz (PML-N) Senator Afnan Ullah.