Online banking raises debate over security

Customers line up at a branch of Standard Chartered Bank in Dhaka yesterday. An online payment system promises to ease the hassles of customers, but banking and IT professionals emphasise secure transactions.Photo: STARMd Hasan

The online payment systems approved by the central bank may face security threats unless a common internet platform is established between banks and merchants, said experts.

The systems may take some more time to come to user level, as the required internet infrastructure is yet to be readied at merchant points to ensure secured transactions for customers.

IT professionals said the security issue is critical to such transactions, as no regulatory system has so far been developed in Bangladesh to monitor internet services.

But intra-bank transactions and transactions with merchants already connected to some banks through a secure internet system will gain popularity, they said.

Bankers said the number of plastic money users will increase significantly following the move by Bangladesh Bank.

According to central bank data updated to June 2008, Bangladesh has four lakh credit card users. The country has one of the lowest records of money transacted by card -- Tk 1,100 crore recorded at the end of June 2008.

To secure a transaction through the internet, the central bank should build an internet network that only banks, merchants and designated customers can access. Otherwise, hackers may manipulate transactions, the experts suggested.

Presently, credit and debit cards are used over the banks' own network or other global network systems such as VISA or Q-Cash.

BB has introduced online payment systems, facilitating fund transfers and payment of utility bills on the net. The new move allows people to use local currency credit cards for online transactions within the country.

Although these services are being introduced on a smaller scale, it is seen as the first step towards full-fledged online banking. This move will certainly enhance the use of e-commerce and online banking services facilitating subscribers of all commercial banks in Bangladesh.

"Despite all the security concerns, it is a big move by the central bank. Everything will settle gradually," said Kazi Saifuddin Munir, managing director of Information Technology Consultants Ltd.

"A virtual private network should be set up for such transactions to ensure security at banks, with merchants and customers."

A virtual private network (VPN) is a computer network that is implemented in an additional software layer (overlay) on top of an existing larger network to create private scope for computer communications or provide a secure extension of a private network into an insecure network, such as the internet.

Talking to The Daily Star, IT professionals working for banks said a few banks are ready to go for such transactions with merchants at the moment.

"Dispute settlement is a vital issue in online banking. There is a possibility that a transaction is hacked in the open internet transaction system," said an official of a leading bank, asking not to be named.

The official said the integration between a bank's foreign software-based network with a merchant that takes an internet connection from an internet service provider will become an issue.

Shoeb Ahmed, former general secretary of Bangladesh Association of Software and Information Services, said BB should arrange a public hearing soon with stakeholders to find a way under which the internet payment system will run safely.

However, he said, if banks connect merchants with the designated software, transactions can be introduced on a limited scale soon.

Under the move, Ahmed said, local software makers can get some work if the government uses local software to collect fees and other public charges.

He suggested a common internet gateway be set up under public private partnership to ensure a secured payment system.

hasan@thedailystar.net