E-commerce refunds worth Rs 127 crore stuck in payment gateways

As of 2021, e-commerce companies owe customers at least Rs 127 crore in refunds stuck at payment gateways, according to commerce ministry documents.

The government introduced the trust system the same year following numerous scandals involving e-commerce companies that failed to deliver products after taking advance payments.

Over the past 10 years, e-commerce scams have skyrocketed across the country, costing thousands of people their hard-earned money.

Many victims had hoped to recover some of their invested funds following government intervention, but are now frustrated by the slow process of disbursing their funds.

Fahim Shahriar, a Qcoom customer, told The Daily Star that he ordered two Yamaha R15 motorcycles in July 2021 for a total amount of Tk 320,000.

Knowing that the fair market value of both the bikes was around Tk 5.82 lakh, it seemed too good a deal for the company to pass up.

He was supposed to receive the product within 30 business days, but to date he has not received either the bike or a refund.

“I went to the Qcoom office several times to get my money back. Each time they promised to return it. But I still haven’t got my money back,” he added.

Qcoom chief executive Md Ripon Mia said the money was blocked as its withdrawal requires approval from the Bangladesh Bank and the commerce ministry.

“I got approval from Bangladesh Bank but not from the commerce ministry, due to which payment companies could not withdraw the money,” he added.

A nine-member commission of inquiry was established to investigate the circumstances of the failure to withdraw money from payment systems on May 19 this year.

According to the report, the Directorate of National Consumer Rights Protection (DNCRP) received a total of 35,437 complaints from people seeking compensation.

As of July 31, DNCRP has resolved 16,667 complaints.

Documents show that the government had Taka 534 crore in the escrow account, of which funds worth Taka 407 crore were disbursed after redressal of complaints.

Escrow is a legal concept that describes a financial arrangement in which assets or money are held by a third party on behalf of two other parties who are in the process of carrying out a transaction.

Escrow accounts are managed by escrow agents such as Bkash, Nagad, Software Shop Limited payment gateways and also some banks.

A DNCRP representative told The Daily Star that the pace of refund payments is still quite slow.

“If the commerce ministry informs Bangladesh Bank about the matter and asks them to take appropriate action, the customers will get their money back soon,” he said.

Md Sayed Ali, deputy secretary, central digital commerce cell, commerce ministry, said that Taka 88.14 crore could be refunded immediately.

“Some companies do not conduct any business and some do not have any operations in the given location,” he added.

“Some of these companies have owners on the run. No one is communicating on behalf of their organizations, so we can’t verify customer claims.”

Ali said payment gateway companies had informed them that the main reason for the slow pace of refunds was the delay by e-commerce companies in providing the customer list.

AHM Shafiquzzaman, CEO of DNCRP, said only companies can say how much of customers’ money is stuck at payment gateways.

He added that the system they gained access to does not show the number of customers.

According to DNCRP, payment gateways have money from 34 e-commerce companies.

Qcoom has Tk 61 crore and Evaly has Tk 13.04 crore stuck with payment gateways.

The Daily Star tried to contact Evaly but was unsuccessful.

The Criminal Investigation Department is investigating money laundering allegations made against Anonder Bazar, DhamakaShopping, E-orange, Akashneel, Alif World, Dalal Plus and Thale.

According to a DNCRP report, e-commerce in Bangladesh began in 1999 with online retailer Munshiji. The store gained popularity after 2010 when the internet and digital payment options became widely available.

It added that competitive e-commerce activity began in 2015.

However, some companies started this type of venture without any prior experience and then started announcing ambiguous discounts and other offers in order to gain control of the market.

As stated in the report, in 2019, companies using such risky business models began to appear on a massive scale.