The digital medium is bound to have vulnerabilities. The local banking system’s digital flank was found exposed this October and November as news spread of overseas hacks on thousands of Pakistani banking customers. Only after that rude awakening did the SBP, the sector regulator, took steps to compel the financial system to beef up their digital payment security infrastructure.
It is about time that the regulatory light is also shone on the e-commerce segment. This space is mushrooming in scale and widening in scope. Hundreds of digital intermediaries are connecting the online and offline spaces in areas of personal/household shopping, ground transportation, home delivery, hotel & ticket reservations, and listings/classifieds in sectors like automotive, real-estate and recruitment.
Sadly, despite passage of many years since e-commerce caught the Pakistani consumer’s attention, this space still doesn’t have a dedicated regulator that can handhold it to responsible growth. Currently, consumers are pretty much on their own. Should their luck run out during a purchase or while using a service, they’re totally dependent on the whims of corporate bureaucracy – and that, too, if they somehow manage to get past the helpline. (Read the CCP’s inquiry report on Kaymu (2017) for background).
The consumer digital protection needs to be covered from all angles. All e-commerce firms need to put in place robust internal control systems that can effectively record, resolve, and redress consumer complaints. But that is mostly about post-purchase liabilities. To ensure consumer protection during pre-purchase and purchase phases, it is imperative to have proper information disclosures, clear return and refunds policies, and no deceptive marketing.
Throw in the issues of data privacy, payment security, and product safety and one is looking at a decent regulatory framework to begin with. An e-commerce regulator has a role to play in promoting best practices in the areas identified above. This is not to say that all individual firms are at fault – but leaving the market to its own discretions vis-à-vis consumer protection would be expecting a lot.
Since 2016, an E-commerce Policy Framework has been under formulation. But so far, relevant sections at the ministries of Commerce, Finance and IT have not been able to make progress. Officials at the CCP, which is the apex consumer watchdog in Pakistan, tried to get this multi-stakeholder effort going in 2017 but unfortunately they got nowhere as there was little support from the top.
Who will bell this cat? The Khan government needs to pick up on this issue where the last government left. E-commerce is here to stay – with or without regulations. But in the interest the sector’s sustainable growth and its potential to create the next wave of jobs, it is imperative to build, retain and grow average customer’s trust in this space. That will require subjecting this system to some checks & balances.
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