Some banks restrict credit card use for Uber services

Uber, a global ride-sharing service operating in Bangladesh, has been found settling customers' credit card payments in foreign currencies, which is a violation of foreign exchange regulations.

Some banks, including the Standard Chartered and the Eastern Bank Limited (EBL), have restricted card payments for Uber services in light of such a discovery.

A notice issued by the British multinational banking giant Standard Chartered Bangladesh for its customers said Uber has been settling payments for its services in Bangladesh in foreign currency. "The payment is being adjusted from the clients' travel quota endorsed on credit cards," the notice read.

However, existing foreign exchange regulations do not permit payments in foreign currency for services availed within Bangladesh.

The bank has therefore taken measures to restrict payments for Uber services, made within Bangladesh and abroad, from credit cards.

However, Standard Chartered clients are allowed to use credit cards on other ride-sharing service providers, read the notice.

When contacted on email, Bitopi Dash Chowdhury, head of the bank's corporate affairs, did not respond.

The EBL, a local private bank, sent out a text message to its clients informing them that payments for Uber and Uber Eats are not permitted through their cards because of regulatory restrictions.

When contacted, Ziaul Karim, head of brand and communication of EBL, said the bank had stopped card transactions for Uber services due to regulatory restrictions.

Foreign exchange guidelines allow a cardholder to spend up to $300 or its equivalent in other currencies through an international card for purchasing foreign services and goods, said a senior executive of Bangladesh Bank.

But payments in foreign currency are not allowed for any domestic services or goods, he maintained.

Earlier, some banks learned that Uber has been settling card payments for domestic services in foreign currency from the Netherlands.

Therefore they stopped card transactions for Uber services as such payments violate rules pertaining to the use of international cards.

No instructions have been issued by Bangladesh Bank on the matter of Uber-related transactions in foreign currencies.

Meanwhile, when contacted through its public relations organisation in Bangladesh, Benchmark PR, Uber did not respond.

Noticing some unusual transactions, Bangladesh Bank tightened online payments through international cards on November 14.

The central bank found that an international credit cardholder of a local private bank had invested in the Australian stock market from Bangladesh, purchasing shares worth around $200.

The stock investor remained free of any problem until he sought permission to cash out the $175 profit he had made from the shares.

Following his request, the said private bank brought the matter to the attention of Bangladesh Bank, seeking permission for encashment. The incident raised concerns about the ease with which a person can use international cards for gambling or other illegal purposes.