State Bank Denies Withholding Google Payments

Payments to Google are allegedly stuck at the central bank, but this has been denied by the State Bank of Pakistan (SBP).

The central bank issued a statement in which it referred to such assertions as “baseless and misleading,” adding that it “strongly refutes all such assertions.”

The central bank described the situation, stating that in order to assist domestic entities, SBP specified specific information technology (IT) related services, which such entities may purchase from abroad for their own use and make foreign exchange payments there against up to $100,000 per invoice.

According to the SBP statement, examples of these services include satellite transponders, global bandwidth, the internet, private line services, software licences, maintenance, and support, as well as services for using databases and electronic media. In order to use this option, entities must designate a bank that SBP will once approve. The central bank added that following designation, such payments may be processed through the designated bank without requiring further regulatory approval.

According to SBP, recent off-site reviews revealed that telcos were using Direct Carrier Billing to send the majority of the money for video games, entertainment content, etc. that their customers had purchased with airtime in addition to the aforementioned mechanism to send money for IT-related services for their own use (DCB).

In general, DCB is a form of online mobile payment that enables customers to make purchases by charging the cost of the item to their mobile phone carrier bill. The telcos were enabling their customers to buy the aforementioned goods using airtime and then sending money abroad to represent such transactions as payments for IT-related service purchases. In effect, the telcos were acting as payment aggregators or intermediaries by making it easier for their subscribers to purchase services.

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