E-commerce sector: Now refund from escrow faces uncertainty  

It seems there is no light at the end of the tunnel for the country's e-commerce customers – at least for now – in getting back their money that was either swindled or now locked with the payment gateways.

The authorities cannot specify when and how the unsuspecting customers, who made advance payments through the mandatory escrow service and were assured of money-back within ten days, will be refunded a whopping total of Tk214 crore from the gateways.

Though the commerce ministry recently asked the Bangladesh Bank to start refunding customers of e-commerce firms who are not facing any lawsuit, government agencies say they do not have a list suggesting who had been sued and who are not.  

"We will hold a meeting Tuesday to map out how the customers can be refunded. If we fail, we will ask the High Court on 28 February to guide us," Md Sayed Ali, e-commerce cell official and deputy secretary of the commerce ministry, told The Business Standard.

The commerce ministry in June this year issued an e-commerce guideline mandating delivery or refund within ten days for advance payments as allegations of embezzlement and fraud surfaced against around 50 e-commerce players including the market giants such as Evaly, E-orange and Dhamaka.    

In that month, the central bank also mandated the escrow system in a bid to prevent e-commerce embezzlement and frauds. The system acts as a third party that receives money from the customer, holds it up, and disburses it to the seller once the delivery is confirmed. Upon delivery failure, the system returns the advance payment made by the clients.

According to the Bangladesh Bank, e-commerce customers paid more than Tk505 crore through the third-party payment gateways until 14 October since the central bank launched it on 30 June. The gateways released around Tk291 crore to the sellers, while around Tk214 crore still remains stuck. 

Of that, the Bangladesh Financial Intelligence Unit (BFIU) froze Tk166 crore of e-commerce firm Qcoom upon the request of police. Qcoom's payment gateway Foster cannot refund the money until police's Criminal Investigation Department (CID) issues the unlock order. 

Apart from Foster, another Tk48 crore is stuck with SSL, shurjoMukhi, bKash, Nagad and Southeast Bank.

Refund efforts sans success

On 25 October after a meeting with Law Minister Anisul Huq and Home Minister Asaduzzaman Khan, Commerce Minister Tipu Munshi announced refunding Tk214 crore promptly. Shortly after, the commerce ministry sent a letter to the home ministry and the Bangladesh Bank requesting unlocking Qcoom's Tk166 crore with Foster.  

However, the amount is yet to be unfrozen. Foster has been called to Tuesday's commerce ministry meeting.

On 28 October, the Bangladesh Bank sent a letter to the commerce ministry seeking opinion about the remaining Tk48 crore. The letter mentioned there was no way to verify whether the companies, whose top executives had been arrested leading to business suspension, had delivered the products or not.

"Repaying e-commerce customers solely on their claims may prompt issues in the future," the central bank wrote in the letter.

Subsequently, the commerce ministry sought the opinion of the law ministry in early November. However, the law ministry is yet to respond.    

Meanwhile, the commerce ministry sent a letter to the central bank earlier this month to return the money to the customers of e-commerce companies that do not have any lawsuit. The Bangladesh Bank forwarded the message to the payment gateways last week.

Did escrow backfire?

Some commerce ministry officials said they are frustrated as they could not refund the customers from escrow service. They said though the service was made a must to protect the customers, it has now become a cause of suffering to the customers.

"It is not logical to leave the customers suffering only due to the wrongdoings of a few rogue e-commerce companies," said a commerce ministry official on condition of anonymity.

"The prolonged crisis is not only disgusting the customers but also affecting the potential of the country's thriving e-commerce sector. I wish the ministries and other public agencies could understand the losses," added the official.

Abdul Wahed Tamal, general secretary of e-Commerce Association of Bangladesh (e-CAB), told TBS that it is important to take steps to settle the cases against the e-commerce firms so that the customers could be refunded promptly.

He said the escrow service is still being operated manually, which needs to be automated.