Tuesday, 28 March, 2023

QR-based Transaction: A Big Move towards Smart Bangladesh

  • Anwar Faruq Talukder
  • 27th January, 2023 06:28:32 PM
  • Print news

To make the exchange modes for goods and services easier people reinvented different modes of exchange, moving from bartering to using coins and paper money, later plastic cards and recently digital payments. Though Bangladesh has a long way to go to become a cashless and cardless society, the trends begin very strongly. On January 18, 2023, Bangladesh bank launched Bangla QR (Quick Response) transaction in a gorgeous inauguration ceremony, where 10 Banks and MFSs participated. This initiative will truly take Bangladesh towards a cashless society.

It is very cost-effective for both users and merchants. It has been reported that if Bangladesh can properly implement QR transactions, the Gross Domestic Product (GDP) will increase by 1.7%. Singapore is fully utilising QR in all aspects. So, physical cards have been obsolete in Singapore. India is also widely using the QR at the micro merchant level. It is mentionable that during the corona pandemic, cashless transactions became very vital and popular. We experienced that cashless transactions increased significantly worldwide also in Bangladesh.

In our country, going cashless indicates the use of credit and debit cards, automated teller machines (ATM), point of sale (PoS), electronic payment using the internet payment gateway, mobile wallet and use of QR. There are around 20.00 million debit cards and 1.9 million credit cards in circulation. Considering the potential of the electronic mode of payment, the central bank rolled out the Bangladesh Automated Cheque Processing System (BACPS) for the first time in 2010, replacing the regional clearing houses, which were operated manually. Under the system, banks are now settling the inter-bank cheque within one working day instead of two to three days needed by the manual system. In 2011, the central bank introduced the Bangladesh Electronic Fund Transfer Network which offers corporate entities to pay wages and salaries to their staff and also allows them to make bulk payments. People can also pay utility bills, loan instalments and insurance premiums through the platform. In 2012, the central bank set up the National Payment Switch Bangladesh (NPSB) with a view to attaining interoperability among banks for card-based and online retail transactions. At present, the NPSB is processing interbank ATMs, POSs and internet banking fund transfer (IBFT) transactions. In a major move, the central bank launched the Real-time Gross Settlement System (RTGS) in 2015, facilitating a safe, secured and efficient interbank payment system in a digital manner. The system allows banks to transfer funds from one bank’s account to another on a real-time and gross basis. These all are the initiatives taken by the central bank. The central bank is very much supportive to expand electronic and QR-based banking.

On the other hand, QR code usage has exploded over the past six years, as multitudes of companies began using them for everything, from advertising and promotions to merchandise tracking and coupons, and more. Consumers are increasingly using QR codes to access media on the Internet, download offers, and find product information and more. QR codes have also started to be used for payments, with customers making payments by scanning a QR code and having the amount transferred directly from their account to the merchant, without the need for a POS terminal. A quick response code (QR code) is a two-dimensional code of black and white squares that can be read by smartphone cameras, point of sale (POS) terminals or other devices. QR is very openly being used by Dutch-Bangla Bank NexusPay, Islami Bank, Eastern Bank, City Bank, Bank Asia, Mutual Trust Bank etc, and MSF like Rocket, bKash, mCash etc. Some other banks are also coming with QR on small scales.

It is very easy to use. Merchants and users both are comfortable using it. Even small shopkeepers, cobblers, tea stall and barber shop owners can receive payment through QR. Any individual owner like Pathao and Uber can take payment through QR. Those who do not have trade license can open retail merchants account permitted by Bangladesh Bank. Bangladesh Bank now introduced inter-operable transactions among banks and MFSs. It will help customers not to keep cash or cards with them. Only a smartphone is required.

Now a strong collaboration is required among banks, mobile operators and payment service providers to give momentum to the cashless Bangladesh, which will be a big move towards “Smart Bangladesh”. The electronic payment mode has an important role to play in making the economy vibrant as it encourages people to engage in economic activities. Our people are very much enthusiastic to use digital services. This is high time to accelerate the QR-based transaction at the grassroots level.

The writer is Senior Executive Vice President, Dutch-Bangla Bank Ltd

Source: Sun Editorial