Uncertainty over refund from e-commerce payment gateways

Uncertainty looms large over refunding Tk214 crore to the e-commerce customers as the amount is now stuck in the payment gateways.    

"We cannot mention any specific date now about customer refunds from the gateways," AHM Shafiquzzaman, chief of Digital Commerce Cell, told journalists Monday.

Of the total amount stuck in the gateways, 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 in SSL, shurjoMukhi, bKash, Nagad and Southeast Bank.     

Commerce ministry officials said customers of rogue e-commerce firms such as Evaly, Eorange and Dhamaka that are now facing police cases will not qualify for the refund from payment gateways.  

"We wrote to the home ministry seeking to unfreeze the money. The refund will begin once CID unlock the money," said Shafiquzzaman, also the chief of the 15-member inter-ministerial committee on e-commerce sector.

He said since the unfreezing does not depend on them, he cannot mention the refund date.

In a separate development on 28 October, the central bank told the commerce ministry that payment gateways will be able to refund customers after verifying the deliveries of the companies that are still in operations.

The delivery verification is not possible for companies that have their top officials in jail on fraud charges.   

Earlier on 25 October, Commerce Minister Tipu Munshi said Tk214 crore stuck in payment gateways would be returned to customers within three months. The Bangladesh Bank will finalise the refund process.

Three days after the statement of the minister, the central bank said several issues had emerged over refund from payment gateways since it was not possible to verify whether the customers of the companies whose activities were closed had received the goods or not.

If the customers are refunded without the delivery verification, further issues could arise, feared the central bank.  

According to the Bangladesh Bank, e-commerce customers have paid more than Tk505 crore through the payment gateways until 14 October since the Bangladesh bank introduced transaction through escrow service on June 30.

The payment gateways released around Tk291 crore to e-commerce companies against their deliveries, while around Tk2014 crore remained deposited to the gateways.  

The Bangladesh Bank has sought the opinion of the commerce ministry on refunding the customers of the e-commerce companies whose activities are closed. The topic was discussed on Monday at the inter-ministerial committee meeting, confirmed a source who was present at the discussion.   

"Many e-commerce companies are facing fraud cases and their CEOs have been arrested too. Besides, some company owners are on the run leaving their firms shut. For these companies, the delivery verification is not possible now. Therefore, customer refund anytime soon is not possible too," said the official in conditions of anonymity.    

He said the committee gave go-ahead to refund from gateways only to the companies whose operations are running.

HC orders customer refund

The High Court on Monday issued a ruling, asking the authorities concerned to explain as to why their failure or inaction to refund e-commerce customers' money stuck in payment gateways should not be declared illegal.

The High Court bench of Justice Md Mozibur Rahman Miah and Justice Md Kamrul Hossain Mollah issued a ruling following a writ petition on the matter.

On 21 October, Barrister Sabrina Zarin on behalf of Conscious Consumers Society, a consumer rights group, filed the writ.

The Bangladesh Bank governor, general manager of the Payment Systems Department of that bank, the commerce secretary and the director general of the WTO Cell of the commerce ministry, chief executive officers of mobile financial service providers – bKash and Nagad, payment gateways – SSL Wireless, Foster Pay, and Surjo Pay, have been made respondents to the rule.

The respondents have been directed to submit an explanation within four weeks.

Sabrina told the media that many customers have paid huge amounts of money for purchasing products from e-commerce platforms, but they neither got their products nor refunds. As a result, customers are unsure whether they will get their money back.

When contacted, AHM Shafiquzzaman said, "I have just heard about the High Court ruling. But we are not inactive. We are working on the refund process."

"And, we are also working on ways to refund customers who paid in advance to e-commerce companies before 30 June and neither received products nor refunds," he noted.

In this regard, the committee will send a report with recommendations to the cabinet division by November 11.

49 e-commerce platforms blacklisted

Police and two intelligence agencies in separate lists have blacklisted 49 e-commerce platforms, said Shafiquzzaman.

"The agencies have also recommended taking action against the companies. We will send the lists to the Bangladesh Financial Intelligence Unit (BFIU). It will look into information on their bank accounts and transactions," the chief of Digital Commerce Cell said.

However, Shafiquzzaman did not disclose the names of the blacklisted e-commerce companies for the sake of investigation.

"We are now keeping the lists secret as the allegations against a company may not be substantiated at the end of the investigation. If the name is revealed now, the business of that company may be damaged," he added.

"If BFIU provides info on bank accounts and transactions of these companies by 9 November, we will come to know how much money they owe to customers," Shafiquzzaman said.

The registration of e-commerce companies will start within a month. And, the unique business identification number of e-commerce will be given before the end of two months, he added.

He further said the registration of e-commerce platforms will begin in one month. Besides, unique business identification numbers to the platforms will be given within two months.