Uber Granted Permission for Card Payments in Bangladesh after 3 years wait
Uber, the app based ride sharing service, has been granted permission to accept card payments in Bangladesh after a three and a half year wait.
The decision was reached by Bangladesh Bank following a meeting with a delegation of ten banks, including Uber, on Tuesday, May 30.
According to an anonymous source present at the meeting, the central bank has given Uber preliminary approval to accept card payments, but with certain conditions. Within Bangladesh, Uber will only accept payments in the local currency, the taka. However, if a foreign national wishes to make a payment in a foreign currency using their card, they will be able to do so.
The source explained that Uber will need to establish a connection with a Bangladeshi Corresponding Bank or PSO payment gateway. Any payments made within Bangladesh will be credited to the corresponding bank account. Subsequently, the central bank will provide instructions on the conversion of the allowed amount of foreign currency from taka to dollars, which will be paid according to the central bank’s instructions. This will enable Uber to account for their parent company.
Furthermore, if a foreigner makes a payment in a foreign currency using a card in Bangladesh, it will also be credited to a corresponding bank account in Bangladesh. The VAT tax can then be paid to the parent company’s account, following the established rules.
It is worth noting that since 2020, Uber has been unable to accept any payments through cards. From 2016 to 2019, approximately $841,000 was transferred to their parent company’s account in the Netherlands without informing the central bank. Upon discovering this, the central bank prohibited payments through Uber’s card. Consequently, the company ceased accepting card payments.
An anonymous senior official from the central bank stated, “Even though the banks stopped accepting card payments within the country, our citizens were unable to make card payments when using Uber abroad. The banks were instructed to address the issue of Uber card payments specifically outside the country’s borders, but only a few banks were able to make the necessary arrangements.”
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The official further explained that banks were summoned to the meeting to discuss the matter. The Foreign Exchange Policy Department (FEPD) circular specified that no payments in foreign currency should be accepted within the country. As a result, banks halted foreign currency payments made through Uber. The official mentioned that the meeting aimed to determine why most banks were unable to enable separate domestic and international transactions through cards due to technical limitations.
When asked about the situation, Sarwar Hossain, Assistant Spokesperson of the Central Bank, informed TBS that banks had ceased accepting card payments because they couldn’t differentiate between foreign currency and local currency payments. The meeting discussed the possibility of enabling Uber payments through cards within the country using local currency and abroad using foreign currency. Hossain added that an arrangement with a local corresponding bank for payment processing must be established before further decisions can be made.
Uber Bangladesh Private Limited had initially requested permission to directly receive service payments into their foreign parent company’s bank account upon commencing operations. However, the central bank rejected this request due to concerns about concealing actual income information through such a method.
