The Bangladesh Bank (BB) has at long last inaugurated a common platform for commercial banks for electronic payments. The national payment switch (NPS) allows for faster purchase and sale through debit and credit cards using the internet and web portals in the country. When all major banks come on board, and up till now only three banks have joined the platform, customers will be able to use their cards from any ATM regardless of which bank they belong to, without incurring significant transaction costs. This facility in itself is a huge step in the right direction to expedite e-commerce.
However, as stated before, unless financial institutions make the jump on to NPS, the effort will fall short of meeting its prime objective. In-country online stores are just taking off. The major bottleneck for such sites until now has been payment. The NPS, essentially a payment gateway that authorises payments for e-business and transactions, which protects security-sensitive information on cards that also ensures that information passed between customer and merchant remain secure. For banks, the system will be particularly useful for avoiding frauds on credit or debit cards, which is a growing threat in the local market as people adapt to using â€œplasticâ€ instead of cash due to convenience. Additionally, given the electronic nature of transactions and the bypassing of numerous networks, a transaction takes mere seconds to process.
What is worrying to see that it took BB three years to set up the NPS system. Given the slow pace of implementation, it must be stressed that BB expedite the rate of adoption by the financial industry so that customers and merchants both may benefit from the numerous advantages NPS has to offer. The advantages of electronic payment gateway systems offer have a solid track record in developing nations all over the Asian and African continents. As a facilitator of e-commerce on the one hand and an aid to reducing capital expenditure of banks and their ability to deliver faster services to customers, gateways like NPS have no rivals. It is hence imperative that BB cut through the red tape to get it operational as soon as possible.