Bangladesh Bank on 30th June 2021 has published a notice with new guidelines regulating online payments in e-commerce transactions. The guidelines come in light of recent reports based on complaints against certain e-commerce sites not delivering goods on time but receiving payments from the customers online through the banks/PSO/MFS/PSP.
As per Bangladesh Bank, the guidelines have been made to increase customer trust in online payment service providers and mitigate risks when there is a delay in delivery of goods. A summary of the guidelines are as follows:
1) Daily essentials and emergency goods and services – In case of food, groceries, medicine, ride sharing, mobile recharge, service delivery or utility, education fee, hotel booking, ticketing (bus, air, train, launch), and providing any other daily essential goods and services and emergency goods and services, where the delivery/supply is made immediately or within 5 days (keeping in mind the type of goods/service and the location), the bank/PSO/MFS/PSP shall settle payments with the supplier/service provider under existing arrangements being satisfied with quality of service, product delivery and business relationship.
2) Businesses which sell/supply their own products/services – In the case of the businesses that manufacture/provide their own goods/services or has their own shop or showroom (and hold a trade license to do so), and where the business provides the services or sells the goods online as well, the delivery or supply of such goods/services must be made immediately or within 7 days (keeping in mind the type of goods/service and the location), and the bank/PSO/MFS/PSP shall settle payments with the supplier/service provider under existing arrangements being satisfied with quality of service, product delivery and business relationship.
3) In case of Digital Commerce Businesses (DCB) other than those mentioned above in (1) and (2), where the payment service providers collected the money from the customer, and in the case of merchant payment, it will be taken as part of their own settlement and then payments will be released to supplier following the directions below:
a) In order to receive payment after providing the goods or service to the customer, the related DCB should provide the name and mobile number of the customer, and the purchase details to the bank/PSO and E wallet service provider’s MFS/PSP.
b) The bank/PSO/MFS/PSP shall verify the above list by randomly checking transactions from the list provided by the DCB and being satisfied of delivery of the goods/services to the customer, the online payment provider will release the money.
c) If any evidence is found later about the non-delivery of any customer’s product/service by the DCB contrary to as claimed above in (b) the payment service provider will immediately issue a notice to show cause and the DCB must respond within 10 days upon receiving the notice.
d) If the DCB fails to provide satisfactory reasons for providing the wrong information, any online payment services provided to that DCB will be suspended and the online service provider shall notify the Bangladesh Bank in this regard. The DCB will be ineligible for such services in the future.
e) In order to bring the process of releasing payments under automation in the future, the payment service providers will take into account the necessary arrangements required which will include confirmation of receipt of goods/services by the customer.
4) In case of vouchers, until the goods and services have been provided in exchange of vouchers issued by the DCB, the money will not be released to them. The same amount of price can be deducted as the price claimed in the voucher issued by the DCB.
5) The money collected from the customer by the payment service provider cannot be used for any other purpose other than for paying the merchant and the merchant must be paid the value equivalent to what was spent.
6) In the case of refund or charge back, the customer must be paid through the same medium used for making the payment, and if any charge is incurred, it will be borne by the digital commerce service providers.
7) No charges can be levied by the payment service provider for compliance with the instructions of this circular.
8) Other than this, the existing methods of cash on delivery/ payment on delivery will continue.
9) The instructions described are only applicable to transactions where individual customers are involved.
Update by Tajriyaan Akram Hussain, Associate, Mahbub & Company