Interoperability among banks, MFS from 2022
The wait for an interoperable digital transaction system is soon going to be over as the government is launching it early next year.
This could be a potential game changer, boosting digital transactions by allowing people to move funds effortlessly within the financial sector in real-time and at lower costs.
For example, money currently cannot be sent from one mobile financial service provider to another.
But with the upcoming Interoperable Digital Transaction Platform (IDTP), users will be able to move funds among the carriers.
"The platform will curb the cost of transactions and harassment in making financial transactions," Zunaid Ahmed Palak, state minister for ICT, at an event yesterday.
The IDTP will not only limit such fund transfers among MFS providers, but also enable it among banks and payment service providers (PSPs).
A mobile app has already been developed to allow clients to register with the IDTP.
Clients will need to complete the registration using mobile apps of their respective banks, PSPs and MFS providers.
If a client holds a number of accounts with banks, PSPs or MFS providers, they will not be required to register every account into the system.
Only one account will need to be registered and other accounts will be added automatically by the financial institutions verifying the national identification cards of clients.
The IDTP will generate an account profile of every registered client, which will provide an "alias" to clients using their name. As a result, they will not need to disclose account numbers. The alias will represent all accounts of a client.
The IDTP clients will then be able to purchase products from shops by scanning QR (quick response) codes.
A QR code is a type of barcode that stores information as a series of pixels in a square grid and can easily be read by smartphones.
The new system will be highly secure as clients will have to be verified through a two-factor authentication for every transaction.
Banks, PSPs and MFS providers will provide clients a one-time password when they attempt to carry out a transaction.
According to a Bangladesh Bank document, the government is having to cough up Tk 56 crore to set up the IDTP which the central bank would govern and operate.
Implementation of the IDTP came about through a 2019 memorandum of understanding signed between the ICT Division and Bangladesh Bank.
According to a BB official, the associated software has already been developed.
A "user acceptance testing", the final stage of software development, and "acceptance testing", performed to determine whether or not the software system has met requirement specifications, have been finalised.
Some banks, PSPs and one MFS provider have already taken part in testing the system out.
About security, he said some measures have been ensured.
Industry insiders said interoperability would give a boost to digital transactions. For this, technological capacities of banks and MFS providers need to be enhanced so that all can be integrated with the system for everyone.
"We have long been proponents of the interoperability for mobile financial service and we welcome it. It will make transactions very easy for the customers and ensure their comfort," Tanvir A Mishuk, managing director of Nagad.
"However, there should be no additional cost imposed on the customer to use it. It should be free of cost for the users," he added.