Careem Payment Solutions has withdrawn its license of Electronic Money Institution (EMI) from the State Bank of Pakistan (SBP), according to the central bank.
It is the second company after UK-based Checkout Limited, which received its In-Principle Approval from the banking regulator but subsequently abandoned its plan.
A Careem spokesperson told ProPakistani, “We are withdrawing our application for the IPA of an Electronic Money Institution license in Pakistan as we focus on growing our ride-hailing platform in Pakistan. We remain committed to simplifying the lives of millions of Pakistanis by ensuring that our customers have access to safe, affordable and reliable transportation and our Captains can access the most flexible earning opportunities. We are also working with licensed partners to pilot simplified financial services on the Careem app such as remittances into Pakistan from the UAE”.
The likely reason for revoking its plan to become a fintech operator could be the prevailing economic situation of the country coupled with the increasing competition in digital banking and financial systems.
Careem Payment Solutions is an associated fintech operator of Careem, a ride-hailing service—a pioneer in Pakistan with a significant network of vehicles and customers. The company has more than 9 million customers, 800,000 Captains, and 3,000 merchants who were to be offered financial services through the same App.
In March 2022, the company also announced to invest $50 million after the announcement of its entry into the fintech ecosystem.
It had plans to offer services ranging from bill payments including utilities, government and education fees, peer-to-peer (P2P) transfer, wallet cash-outs, payment cards, inward international remittance services as well as services that could enable Customers and merchants to make and accept online or offline payments.
Earlier in the same year, the company suspended its food delivery business in Pakistan for consolidating its ride-hailing business and shifting its focus toward financial services.
There were 12 EMI/ fintech operators listed as legal entities by the SBP. Four of these companies have lived their businesses including NayaPay, Finja, SadaTech, and CEMPECC.
Three operators received permission for pilot operations including Wemsol, Akhtar Fuiou, and EP Systems. Hubpay and YAP Pakistan received in-principle approvals. The initial license of TAG innovation was suspended by the SBP. Besides, Checkout and Careem Payment Solutions withdrew their licenses.
