Pakistan’s central bank on Friday revoked the in-theory and pilot functions acceptance of Tag to run as an electronic revenue establishment in a move that poses existential danger to the business.
State Bank of Pakistan mentioned in an buy that it is revoking Tag’s approval to operate as an electronic money institution, the authorization that is expected for entities to offer you ground breaking, user-helpful and cost helpful low-benefit digital payments instruments these types of as wallets, cards and contactless payments. The central lender has also requested the startup to near all customers’ wallet accounts and pull its apps from the application retailers with speedy influence.
The central bank’s motion is in reaction to Tag violating regulatory prerequisites and “other concerns” that emerged during the pilot functions of the company, it mentioned. The conclusion has been taken to “protect the interest of the general public at massive,” it included.
The regulatory action follows a months-extensive probe into Tag, which delivers banking and economic companies these types of as contactless payment, cards and wallets to buyers in Pakistan.
The startup has been accused of forging paperwork to the central lender, in accordance to an earlier investor letter attained by TechCrunch. The central financial institution requested Tag in August to “immediately” refund all cash of consumers.
Tag is a person of the fastest growing startups in Pakistan. It was valued at $100 million in its seed funding spherical in September past calendar year. The startup counts Liberty Town Ventures, Canaan Associates, Y Combinator, Addition and Mantis between its backers.
The State Bank of Pakistan did not immediately reply to a ask for for comment through phone and e mail.
Friday’s motion is one more blow to the nascent but quickly escalating startup ecosystem in Pakistan, which clocked document funding final yr. Airlift, once the most beneficial startup in the South Asian marketplace, shut down in July this year following it failed to safe refreshing funding.
Tag’s main government couldn’t be quickly arrived at for comment. The startup will examine captivating the Point out Bank’s decision, a resource with immediate knowledge of the subject informed TechCrunch.