Fresh impetus to contactless payment

Bangladesh Bank yesterday widened the scope for contactless payments in order to further boost touch-and-go transactions and push the country towards a cashless economy.

From now on, contactless payments of up to Tk 5,000 per transaction can be done using debit and prepaid cards apart from credit cards, the central bank said.

Earlier, up to Tk 5,000 payment could be done through contactless credit cards. In case of debit and prepaid cards, the limit was Tk 3,000 per transaction.

"It is a revolutionary step at a time when the world is moving towards contactless payment. The more people use contactless cards, the more cashless the economy will become," said Syed Mohammad Kamal, country manager of Mastercard, a global payment technology company.

The development comes at a time when the use of cards, including contactless ones, is increasing gradually thanks to efforts by the financial institutions to popularise tap-and-pay technology, which allows users to make payments digitally and avoid close contact with salespersons during purchases.

Bangladesh Bank allowed the rollout of contactless cards since 2018, and its popularity has accelerated because of the coronavirus pandemic both locally and globally.

As of November 2022, banks have issued 3.49 crore cards, including 2.94 crore debit cards and 20.87 lakh credit cards. Card users transacted over Tk 39,000 crore in November, according to Bangladesh Bank data.

Kamal said contactless payment technology is present in more than 60 per cent of the credit cards issued in Bangladesh so far.

He said contactless payment technology will improve user experience and reduce the risk of fraud.

A senior official of Bangladesh Bank said increased electronic transactions would enhance transparency and the state's revenue collection.

Mahiul Islam, head of retail banking at Brac Bank Ltd, said users of contactless cards would not require to insert cards in the point of sales (POS) terminals and give their PINs for over Tk 5,000 transactions from now on. They will be able to make payment by tapping their cards and using PINs only, he added.

"This is a very good step. This will speed up digital transaction," said Islam.