Ministry of Commerce wants to recover 474C from e-commerce sector

The Ministry of Commerce is considering imposing a service charge of 1 to 2% for the disbursement of funds valued at Tk 214 crore, which will be charged by payment gateways when disbursing funds from customers.

The Ministry of Commerce is seeking to recover Tk 474 million in e-commerce sector funds that have been taken from consumers as prepayment by malicious platforms.

Consumer money was blocked on malicious platforms as well as payment gateways after the escrow system was introduced in July.

According to central bank data, consumers paid more than Tk 505 crore through payment gateways from June 30 to October 14, of which Tk 291 crore was paid to the platforms against deliveries.

The central bank introduced the escrow service to regulate fraudulent e-commerce platforms in response to claims against them that they would accept prepayments and fail to provide products or refund.

However, due to the manually operated escrow system, another crore of Tk214 funds is stuck with payment gateways, which could not be refunded by financial service providers unless instructed by the government to do so.

Previously, the Criminal Investigation Department (CID) froze several accounts linked to rogue e-commerce platforms that took their consumers’ money in advance but failed to deliver products or refund.

The Bangladesh Financial Intelligence Unit (BFIU) has frozen 166 crore of Tk from e-commerce company Qcoom at the request of the police.

This is the payment gateway Foster could not make a refund until the CID instructed it to do so.

Additionally, another Tk48 crore was blocked in SSL, shurjoMukhi, bKash, Nagad and Southeast Bank.

When Dhaka Tribune contacted several of these platforms, many of them explained that they were operating under guidelines introduced by the government and could not act alone against their regulators, the central bank.

To this end, the Ministry of Commerce recently sent a letter to the CID to take the necessary steps to recover Tk 214 crore of these funds.

The Minister of Commerce Tipu Munshi had also ensured earlier in October the return of funds at the initiative of the central bank.

At a press conference on Monday, AHM Shafiquzzaman, additional secretary of the Ministry of Commerce and head of the digital commerce cell (DCC) formed by the ministry, said the ministry was working to recover another Tk260 crore taka that had been taken in advance before the introduction of the escrow system.

However, he did not specify the method or the timeline.

The DCC chief also said that three intelligence agencies identified 49 e-commerce platforms that defrauded customers and traders of thousands of taka crore.

“There could be more rogue platforms like this,” Shafiquzzaman said, without naming names.

Meanwhile, the Commerce Ministry plans to impose a 1-2% service charge for disbursing funds worth Tk 214 crore from consumers and e-commerce businesses blocked by payment gateways, according to the head of the DCC.

Speaking to Dhaka Tribune, Sahab Uddin Shipon, vice president of the Bangladesh Electronic Commerce Association (e-CAB) explained that the Ministry of Commerce will not charge service fees.

“The service fee will be charged by the payment gateways when disbursing funds from customers who have used their services, not by the Ministry of Commerce,” said the vice president of e-CAB.

The central bank, meanwhile, has reportedly said it faces numerous problems repaying funds stuck on payment gateways.

When it comes to verifying whether or not the products are received by customers, the central bank has faced problems since the shutdown of several malicious platforms as several former officials changed jobs.

In an escrow payment service, money paid by customers is deposited with third-party payment gateways, which withhold the amount until e-commerce businesses submit supporting documents proving that the goods have been delivered.

Several online stores were also unable to access advances paid by buyers even after delivering the products.

According to the Bangladesh Electronic Commerce Association (e-CAB), the main problem is that the escrow system is not automated.

Manual operations delayed the distribution of funds as well as current problems with the verification system, according to the association.