#Title

Incentivise e-payments to speed up digital transformation
Experts say at Visa-The Daily Star webinar
Star Business Report
Both the government and the central bank should take initiatives to provide cashback or incentive to customers for carrying out transactions using digital tools with a view to attaining sustainable economic growth, experts said yesterday.
The country has made an impressive stride in expediting digital financial services (DFS) during the coronavirus pandemic as remote working received a boost to keep the deadly virus at bay while e-commerce, e-payment and even e-learning took a major leap forward.
Now, the regulators and the government should step up their efforts to keep the wheel of the transformation moving, the experts said at a webinar.
Visa and The Daily Star jointly organised the event titled “Digital Bangladesh 2021: Payment Systems and Fintech”.
The government introduced a 2 per cent cash incentive on remittance, giving a great boost to the inflow of the money sent by expatriate Bangladeshis, said TR Ramachandran, group country manager for India and South Asia operations at Visa Inc.
“Such incentives can be applicable to widen the DFS. India, Nepal and many other countries have achieved tremendous success by using the policy,” he said.
The authorities should take required policy measures to allow clients to enjoy cashback or incentives on the transactions by using DFS tools. Tax rebate may also be given if people settle transactions digitally, he said.
Bangladesh has enjoyed a surge in DFS in recent years and Visa is one of the pioneers in the area in Bangladesh, Ramachandran said.
Visa is a global payments technology company working to enable consumers, businesses, banks and governments to popularise the use of digital currency.
The US-based company facilitates electronic funds transfers throughout the world, most commonly through Visa-branded credit, debit and prepaid cards.
“The regulators should think whether charges will be imposed on clients who make cash transactions at banks,” said Abul Kashem Md Shirin, managing director of Dutch-Bangla Bank Ltd.
“The use of cash will fall if such a measure is taken. This will ultimately help build a cashless society,” he said.
The government may consider offering 5 per cent cash incentive per transaction, said Syed Mohammad Kamal, country manager of MasterCard.
Of the incentive, 3 per cent will go to clients and 2 per cent to merchants, he said.
A level-playing field should be ensured for all DFS providers to ensure a sound business environment, Kamal said.
“Cashless society is an indispensable part to achieve further economic growth in the country,” said Mahfuz Anam, editor and publisher of The Daily Star.
“We need robust infrastructures to build the public’s trust in DFS. Legal infrastructures have yet to be defined in some cases. Such infrastructure is highly important to bolster the public faith in the financial system,” Anam said.
Posts and Telecom Minister Mustafa Jabbar said the coronavirus pandemic accelerated the momentum of transformation to a cashless society.
“Villages will be brought under 4G internet connectivity within the next year,” he said.
Transactions through cards, mobile financial services, internet and agent banking are growing, in a sign of improving physical infrastructures of DFS, he said.
“But we will have to ensure legal infrastructures in tandem as cybercriminals are relentlessly trying to siphon off money from banks,” the minister said.
Half of the population is yet to get an opportunity to open accounts with banks, said Md Arfan Ali, managing director of Bank Asia, which pioneered agent banking in the country.
“This has created a gap between the banked and the unbanked people when it comes to accessing services from the financial sector,” he said.
“We should work together to remove the discrimination. And agent banking is doing well to make the digital financial inclusion vibrant.”
Uniform guidelines should be rolled out to promote mobile financial services, said Kamal Quadir, chief executive officer of bKash, the country’s leading MFS operator.
There are different types of MFS providers and their organisational structure contradicts with each other, he said.
“A haphazard situation will be created unless the issue is addressed properly,” Quadir said.
Interoperability is highly important to give a boost to the country’s MFS sector, said Tanvir A Mishuk, managing director of Nagad, another leading MFS operator.
rEad more on b3