Bangladesh Bank Governor Atiur Rahman shows a banknote at the launch of a national payment switch at the central bank in Dhaka yesterday. The new system will accelerate e-commerce in Bangladesh. Photo: STAR
The central bank yesterday launched National Payment Switch, a common platform for the country's commercial banks for electronic payments, which is going to revolutionise e-commerce in Bangladesh.
â€œThe advantages of this new payment platform are enormous. E-commerce will spread across the country,â€ said Bangladesh Bank Governor Atiur Rahman.
Once all banks in Bangladesh join the NPS, a customer using a credit or debit card of any bank will be able to draw cash from any ATM and POS (point of sales) in the country. And transaction costs will significantly go down as the transactions will be routed through the NPS instead of Visa, Master or Amex card networks abroad.
Moreover, purchase and sale can be done with cards through the internet and web portals within the country.
Only three banks -- Dutch-Bangla, Pubali and Southeast -- have so far joined the NPS. BB officials said it will take two or three months for all banks to join the network.
However, Naznin Sultana, deputy governor of central bank, said all banks will join the NPS in one month.
The BB governor said the NPS will facilitate easy access to funds, an increase in tax revenue, more flow of money in the economy, and financial inclusion. He said the BB will also be able to supervise banks prudently as electronic transactions will be made through a single switch.
â€œBanks will not need to pay network fees to the Visa or Master Card. Banks can ultimately reduce fees paid by customers,â€ said Ahsan Ullah, BB executive director, and project director of the Central Bank Strengthening Project, under which the NPS has been installed.
The central bank has set up the NPS at a cost of $5 million (around Tk 40 crore) funded by the World Bank. It took more than three years to install it.
Though many Asian and African countries have the system in place for long, Bangladesh took quite a while to a set up a common electronic payment platform to help banks and their clients make transactions in an easy and cost effective way.
Individual payment platforms introduced by different banks will be abolished once all banks join the common platform.
Bankers have hailed the move, saying it will reduce their capital expenditure significantly and help deliver services to clients at a much faster pace.
â€œBanks can cover more areas and clients by using the existing number of ATM and POS,â€ Abul Kashem Md Shirin, deputy managing director of Dutch-Bangla Bank Ltd, told The Daily Star.
â€œIt's a big day,â€ said Helal Ahmed Chowdhury, managing director of Pubali Bank. He said the NPS will facilitate transactions between banks.
Mahbubul Alam, managing director of Southeast Bank, said a national infrastructure has been built with the installation of the NPS.
â€œIt will help us make settlements in no time. It will also reduce costs,â€ said Alam.
Nurul Amin, chairman of Association of Bankers Bangladesh, and the managing director of NCC Bank, said the NPS will increase transparency in transactions.