The central bank launches a “scan to pay” solution to integrate micro-merchants into the digital payment ecosystem
Have you ever eaten fuchka in a food cart at a tourist spot only to find that you forgot your bag or wallet? Or did you come home in a rickshaw but have a 500 Tk or 1000 Tk ticket and the paddler has no change for it?
It’s hard to find someone who hasn’t landed in a weird situation like this sometimes. Well, worry no more, Bangladesh Bank has launched Bangla QR payment system to bring you a safe and affordable solution.
Sellers can easily avail a unique Bangla QR code if they have a bank account or mobile financial service (MFS) personal retail account.
They don’t even need to have a smartphone to accept payments through this mode of transaction, but customers must have an MFS app or a compatible banking app installed on their smartphone with an internet connection to make a payment.
A QR (Quick Response) code is a type of matrix barcode. It is a machine-readable optical label that contains information about the item to which it is attached,
To accelerate the financial inclusion of countries, the central bank’s payment systems department recently developed this interoperable “scan to pay” initiative.
This alternative to expensive point-of-sale (POS) devices, the payment acceptance solution aims to integrate more micro-merchants into the digital payment ecosystem, with the aim of moving the country towards a “less society.” of cash ”.
Md Serajul Islam, Executive Director and spokesperson of the Bank of Bangladesh, told The Business Standard: “This will strengthen the presence of digital businesses in the micro-merchant arena, where most of the sellers are outside the banking system. formal. We are trying to welcome them into the formal channel through this initiative.
“We are not only working on the payment system, but also on the facilitation of other banking activities through digital services all over the country and we are also looking forward to the overall development of financial inclusion at the rural level”, a- he added.
Bangladesh Bank has strictly advised Bangla QR adopters to ensure that the cost of the Merchant Discount Rate (MDR) is not passed on to customers.
MDR is billed to a merchant for credit and debit card and MFS payment processing transactions.
Fees and charges for transactions processed through Bangladesh Bank’s network will be in accordance with its guidelines, while fees for other processors will be based on their policy.
However, processors are encouraged to reshuffle their fee structure as much as possible based on Bangladesh Bank’s network fees, which is still under negotiation.
The chairman of the SME foundation, Prof. Md Masudur Rahman, told TBS: “If this system is realized, our financial ecosystem will benefit a lot. But for that, stakeholders such as banks and MFS service providers need to make upfront investments to popularize the code. payment method based on “.
The regulator should also monitor it regularly to ensure the safety of the money of these micro-level providers, he said, adding that banks may also initially relieve traders of processing fees to attract them to the system. digital payment.
Earlier, on January 6 of this year, the central bank issued guidelines on Bangla QR for building a secure, affordable and efficient payment and settlement system at the retail level.
According to the guidelines, an individual can transact up to Tk 20,000 per day in case of static transactions based on Bangla QR.
Merchants will be able to accept funds using this method from a variety of payment instruments, including all types of bank cards and accounts, MFS and e-wallets.
Sources at the central bank said that all banks and MFS providers will be under the transactions channel and that 8-10 financial institutions, which will facilitate QR payments from its clients’ accounts, are already working on issuance. of Bangla QR, while 4 to 5 other institutions acquire traders. accounts.
Islami Bank Bangladesh Limited and Pubali Bank Limited have already completed the Bangla QR usability pilot. Mutual Trust Bank Limited and Eastern Bank Limited have also integrated Bangla QR into skybanking applications.
Managing Director and CEO of Pubali Bank Limited, Safiul Alam Khan Chowdhury, said: “We are delighted to be working with Bangladesh Bank on this revolutionary initiative.
Shamsuddin Haider Dalim, Head of Corporate Communications at bKash, said: “bKash has already deployed a QR code for customer convenience. We are now working on the feasibility of technological integration to bring commonalities with Bangla QR code for the convenience of our customers. ”
SSLCOMMERZ, a payment gateway aggregator, is working to acquire merchant accounts for Bangla QR in conjunction with banks and card network partners after obtaining central bank approval. SSL has already acquired over 50,000 merchant accounts.
In a recently hosted virtual program, Sayeeful Islam, Managing Director of SSLCOMMERZ, said: “The QR payment service will directly benefit millions of small and medium-sized entrepreneurs, suppliers, distributors and factory owners across the country. We hope to turn this dream into reality. , not just in Dhaka but across the country very soon. “
Mastercard Bangladesh also gives access to Bangla QR to make payments in conjunction with banks such as Mutual Trust Bank Limited.
At a recent virtual launch ceremony, Syed Mohammad Kamal, Country Director of Mastercard Bangladesh, said: “Mastercard will continue to introduce technology-driven solutions and simple, smart and contactless payment options. secure. We would like to integrate this service for foreign Mastercards. incumbents in the future. “
Experts said it would be difficult to convince a micro-merchant to open an account with Bangla QR access. This is because, they say, they are not used to such activities. Many of them also fear the tax regime in formal banking channels.
It is also very important to assure traders that in the future they will get other banking facilities, such as loans, if they register with Bangla QR, they added.
In this regard, BB spokesperson Md Serajul Islam said that the banking system will offer more exclusive products in the future. Time will determine whether or not micro-traders get a loan opportunity against Bangla QR.
However, stakeholders also expect a positive impression from small vendors, as most of the country’s residents have smartphones.
People also prefer digital contactless payment methods during the pandemic, where Bangla QR can be a game-changer in the country’s digital transaction system.
Endra Mohan Sutradhar, Deputy Managing Director and Head of Software Development Division at Pubali Bank Limited, said, “Technologically, the method is almost uncomplicated and customers can easily access it through the app. So, no need to carry cards in the future. ”
If payment by code is accepted by everyone, it will significantly reduce bank charges, he added.
“We initially integrated this system into our PIbanking application and look forward to working in a larger aspect within two weeks or more,” he also said.
The BB guidelines on Bangla QR mentioned that some banks, payment systems, MFS, PSP and PSO have already prepared their own standards and infrastructure to facilitate payments based on closed loop QR codes. This has, however, increased the inefficiency of payment systems as a whole.
In this context, the Bangladesh Bank, in consultation with stakeholders, developed a national QR code standard for Bangla QR for payments based on interoperable open-loop QR codes.
The central bank has also asked those who have already introduced an exclusive standard QR code to replace it with Bangla QR by December 31, 2021.
In this regard, a central bank official said that the acquisition of merchant accounts by banks and MFS providers had just started in August after the delay caused by the pandemic. So now we are not thinking about the deadline and we are moving forward. Hopefully, banks and MFS will quickly adopt Bangla QR.
There is no official data on the number of micro-traders in Bangladesh. The last time a survey was conducted was in 2013, when the number of small businesses, excluding cottages and micro businesses, was 79 lakh. However, people related to this industry say the number is over one crore.