Pakistan strips YC-backed Tag of fintech services, orders to pull apps • TechCrunch

Pakistan strips YC-backed Tag of fintech services, orders to pull apps • TechCrunch

Pakistan’s central financial institution on Friday revoked the in-theory and pilot functions approval of Tag to function as an digital revenue establishment in a move that poses existential menace to the business.

Condition Bank of Pakistan claimed in an order that it is revoking Tag’s approval to work as an electronic money institution, the authorization that is needed for entities to offer ground breaking, consumer-helpful and value productive low-benefit electronic payments devices such as wallets, playing cards and contactless payments. The central financial institution has also ordered the startup to shut all customers’ wallet accounts and pull its applications from the app suppliers with instant effect.

The central bank’s action is in reaction to Tag violating regulatory demands and “other concerns” that emerged for the duration of the pilot functions of the agency, it said. The choice has been taken to “protect the interest of the general public at huge,” it extra.

The regulatory action follows a months-extensive probe into Tag, which delivers banking and money solutions these kinds of as contactless payment, playing cards and wallets to buyers in Pakistan.

The startup has been accused of forging files to the central lender, according to an before trader letter obtained by TechCrunch. The central financial institution purchased Tag in August to “immediately” refund all cash of consumers.

Tag is a single of the quickest growing startups in Pakistan. It was valued at $100 million in its seed financing round in September past yr. The startup counts Liberty Metropolis Ventures, Canaan Companions, Y Combinator, Addition and Mantis among its backers.

The Condition Financial institution of Pakistan did not promptly answer to a ask for for comment by means of cellphone and electronic mail.

Friday’s motion is a different blow to the nascent but speedy increasing startup ecosystem in Pakistan, which clocked document funding last year. Airlift, as soon as the most precious startup in the South Asian sector, shut down in July this year soon after it failed to safe refreshing funding.

Tag’s main executive could not be quickly achieved for remark. The startup will check out interesting the Point out Bank’s choice, a resource with direct information of the subject instructed TechCrunch.

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