KARACHI: State Bank of Pakistan (SBP) has prohibited transfer of outward remittances through newly introduced on-boarding merchant accounts.
The central bank in its rules issued for ‘Digital On-boarding of Merchants’ directed the acquiring institutions – Electronic Money Institution (EMI), and any non-banking entity duly authorized by SBP to on-board merchants under these Rules –not to permit cross border outward remittance transactions from these accounts.
The SBP said that acquiring institutions shall devise continuous monitoring mechanisms to ensure that merchants on-boarded not perform functions of Banking, Electronic Money Institutions (EMIs), Branchless Banking Agents, or any other activity for which specific and separate permission is required from SBP under the relevant laws and regulations.
The central bank further directed under these rules, included:
a) Acquiring institutions shall ensure that one CNIC holder can open only one Merchant Account in their Acquiring institution.
b) Acquiring institutions shall ensure that Merchant Accounts are only used for digital collection of payments against the provision of legitimate goods and services.
c) Acquiring institutions may provide electronic payment instruments like Debit Cards, Credit Cards, Direct Credit Transfers, Direct Debit etc. as per their own policies and procedures.
d) Acquiring institutions shall provide digital payment acceptance channels to these merchants that may include but are not limited to POS machines, m-POS, QR code, mobile payment applications, direct credit transfers, e-commerce gateways, etc. depending on their needs and requirements.
The SBP defined the digital merchants as: the digital merchant shall include small businesses or individuals providing legitimate goods and services like transport, home deliveries, small grocery and kiryana stores etc.
Acquiring institutions are especially encouraged to facilitate the digital on-boarding of women providing services from their home like cooked food, drapery services, handicrafts, tuition services etc., the SBP added.
Acquiring institution shall activate Merchant Accounts after fulfilling following KYC/CDD requirement of merchants:
a) Biometric Verification or Verisys from NADRA. In case of NADRA Verisys, Biometric Verification shall be mandatory at the time of first cash out or within three months of opening of these accounts, whichever is earlier. These accounts shall be deactivated if Biometric Verification is not carried out within three months of opening of accounts.
b) Pre-screening of merchants’ particulars against lists of entities and individuals designated by the United Nations Security Council (UNSC), lists of entities and individuals proscribed under the Schedule-I and Schedule IV of the Anti-Terrorism Act, 1997, respectively, and any other applicable sanctions lists.
c) Call Back Confirmation or generation of One-Time Password (OTP) for verification from merchants.
d) Carry out full or enhanced due diligence of merchant as per Acquiring institution own risk assessment, in light of applicable laws and regulations (if applicable).
e) Acceptance of terms and conditions provided in English and/or Urdu language of Merchant Account by the merchant.
Acquiring institutions shall place following maximum transaction limits on merchant accounts;
i. Rs. 50,000 per month for accounts opened remotely through NADRA Verisys
ii. Rs. 500,000 per month after Biometric Verification
b) The above transaction limits will be separately applied on Debit and Credit transactions
c) Acquiring institution may place lower transaction limits keeping in view of their institutional risk assessment and high-risk geographical locations of merchants.
The SBP also imposed Maximum Account Balance limited, included:
a) Acquiring institution shall ensure that merchants’ account balance shall not exceed the following limits at any point of time:
b) Rs. 50,000 till Biometric Verification
c) Rs. 500,000 after Biometric Verification
