The use of card-based and other digital payments has been consistently on the rise in recent years. People are getting the varied financial benefits out of the use of plastic money. The surge in the number of digital financial services offered by local banks has also been propelling the market to become cashless.
The most popular conventional payment media are the debit and credit cards. Available data show that the number of debit and credit card users in Bangladesh currently stands at 11 million and 0.98 million respectively, and they transacted Tk 24.38 billion in April-June this year.
Since billions of taka is being transferred every day by using cards, focus should now be on strengthening their security. Security features of cards should be enhanced to ensure that the money transacted through them reaches the desired destinations.
Only a few years back, a shopper would go to a marketplace to buy his/her items of choice and pay in cash. A lot has changed since then. Availability of computers at homes and launching of solutions like cards by banks and later mobile financial services by platforms like bkash introduced the concept of cashless shopping. The growing use of smart-phones has also made anytime, anywhere payments easier.
Global projections say payments industry will soon be in a transformational state. A Payment System law is considered to be a prerequisite to pushing the payment industry to the next level. Bangladesh is likely to follow the global trend. A Payment System law has reportedly been drafted. Once the law is passed, local banks can move for digitisation in a more secure manner.
The payment system of a country is the channel through which the central bank conducts the financial transaction part of its monetary policy. Section 7A(e) of the Bangladesh Bank (BB) Order-1972 stipulates that one of the main functions of the central bank is "to promote, regulate and ensure a secure and efficient payment system." BB, accordingly, issued a circular last week providing permission for card-based payments through contactless payment service by using the Near-field Communication (NFC) technology and ensuring security, minimising transaction risks and enhancing public awareness.
Earlier, BB devised methods for implementing the new payment platforms, i.e. National Payment Switch (NPS), e-Payment Gateway, and Real Time Gross Settlement (RTGS) alongside upgrading the required legal and regulatory framework befitting the electronic payment platforms.
The private banks will be benefited if BB, the regulator, allows more modern solutions for easing the payments and strategising the payment systems. A comprehensive strategy for digital banking is an imperative for the banks. They must meet the expectations of digital natives, delivering diverse tools for helping customers make smart decisions across a range of financial services.
