Pathao ventures into fintech

Technology-based startup Pathao has applied for a Payment Service Provider (PSP) licence from Bangladesh Bank as it plans to venture into fintech with “Pathao Pay”.

Earlier in an interview with Dhaka Tribune, Fahim Ahmed, president of Pathao, had said that the company is going to launch a fintech service to provide payment services to its large consumer base.

According to Pathao, it currently has an ecosystem of over 8 million users that it serves with ridesharing, food delivery, and courier services, successfully creating opportunities for over 300,000 individuals, serving 30,000 f-commerce merchants and over 10,000 restaurants.

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He also said that the penetration of the digital payment market is very low with the vast majority of transactions still being settled in cash, which presents an opportunity for a consumer tech company such as Pathao to facilitate digital payments and drive greater adoption.

“Access to consumer credit is limited in Bangladesh.  We have the lowest credit card penetration in the region; neighbouring countries such as India and Indonesia have six to seven times greater penetration,” he said. 

“Young people between the ages of 21 to 45, who also constitute Pathao’s primary target market, are among the most underserved.  We are keen to develop solutions for these problems,” he told Dhaka Tribune during the interview.

Additionally, Pathao has been aspiring to be a one-stop solution for all sorts of digital services that would offer convenience for the people.

“Before the end of this year, we will be launching fintech products for our consumers,” said the Pathao president.

Over the past year, Pathao has introduced several new products and verticals, including grocery, medicine delivery, health, and entertainment.

According to sources at the central bank, it has recently issued a no-objection certificate (NOC) to Pathao in this regard. 

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However, Bangladesh Bank before issuing the final licence will be monitoring all activities of the payment service for a period of one year.

When a business organization applies to the central bank for permission as a PSP and Payment Service Operator (PSO), it has to submit its business concept and related documents to the Payment Systems Department of Bangladesh Bank.

According to the Bangladesh Bank Act, a business entity receives final approval only when the central bank is satisfied with the review of all relevant documents and business certificates of the entity as PSP and PSO.

At present, IP Systems Limited, D Money Bangladesh Limited, Recerson Fintech Limited, Green and Red Technologies Limited, IT Consultants, SSL Commerce, Surjo Mukhi, Pragati Systems Limited, and Portonics Limited have the approval to operate as PSPs and PSOs.