Mobi Direct has withdrawn its license from the State Bank of Pakistan for setting up an E-commerce Payment Gateway.
The company is among the first in its category of PSP/PSO operator, which took a regressive move considering the prevailing economic and cutting-edge market situation.
More operators will likely follow suit. Mobi Direct (Pvt.) Limited is a Special Purpose Vehicle formed with the help of a select group of professionals with expertise in diversified businesses for the assistance and development of financial networks in rural economies.
The operator received in-principle approval from the banking regulatory body in 2016. Since then, the operator has not made any progress in the next phase to obtain permission for the pilot launch of its services as an e-commerce gateway.
Analysts said that the growing competition among market players, evolving technology trends in the financial sector, and fear of low returns on investment could lead the operator to surrender its plan of doing business.
They further said the high paid-up capital requirement of Rs. 200 million is also one of the reasons that PSO operators are struggling to establish their businesses in Pakistan.
According to the State Bank of Pakistan (SBP), out of a total of twelve companies, there are five categorized as payment service providers or payment system operators functioning in Pakistan. Three of these operators have been approved for pilot operations, while four others hold in-principle approval or licenses to establish their business in Pakistan.
Seven operators have not made any progress for the last eight to ten years, and neither the banking regulator nor they have canceled their licenses for not making any development within the given scope of work.
Recently, several Electronic Money Institutions (EMIs) have either withdrawn their initial and commercial licenses or have opted to be cautious about launching their services in the financial sector.
