Mominul Islam, a businessman in Dhaka, has almost no cash in hand but has a card with which he can make all his transactions within seconds.
Many consumers like Islam now just keep an ATM card and go everywhere with virtually no cash but are having their works done.
This shows that a transition already begins to happen- from cash-based trading to cashless trading.
In the late 1990s, the use of bank cards was very rare as people were unaware of it, and scope to use the cards was also limited, but the situation has largely changed today, with a significant number of people carrying bank cards with them.
Banks are offering cards- debit and credit- with different facilities. Drawing cash from an ATM booth with debit or credit card is a 24 hours a day and 7 days a week facility.
People are increasingly using bank cards to pay their utility and shopping bills.
Money transfer with mobile phones has also become a common phenomenon in the country. While cards are still mostly used by the high and middle income people in Bangladesh, the money transaction through mobile phones becomes popular among the lower-income group.
Industry people estimate that banks’ annual growth of card sale currently reaches 40%.
The present volume of transaction through cards and its growth rate are more impressive.
Bangladesh Bank data shows that the debit card transactions rose to Tk600bn in 2012 from Tk200bn in 2010 while the credit card transactions grew to Tk200bn in 2012 from naught in 2010. Today, almost all bank account-holders belong an ATM card.
Out of total 47 commercial banks in the country, 40 maintain ATM booths. According to the central bank records, the number of ATM booths across the country increased to 2,958 in 2012 from 1,600 in 2011.
Bankers said the ATM cards have some privileges like no risk of carrying cash, safe transaction, low cost of cash management, faster business and easier tracking of online transactions.
“The bank cards are getting increased popularity as there are no risk of carrying cash, easy cash withdrawal, availability of ATM booths in all neighbourhoods and the acceptance of debit card in an increasing number of shops,” said M Haider Ali Miah, managing director of Exim Bank Ltd.
“Cards have become an absolute necessity to the city dwellers,” he said. “When the country suffers strikes or hartals, people would prefer to withdraw cash from booths rather than going to banks.”
According to an official working in a bank’s card department, around 12m people are prospective clients of credit cards in Bangladesh, but the users are still less than 5%.
He said: “Though the environment was easily susceptible to fraud and manipulation, my bank assured the consumers that it would continue to improve its institutional capacity for safe online transactions.”
M Haider Ali Miah added that the central bank is playing an important role acting as a facilitator towards developing cashless transaction.
Last year, Bangladesh Bank has launched national payment system aimed at providing a roadmap for efficient electronic payments system that is internationally recognised.
The NSP was designed to promote financial intermediation, financial inclusion and thus increase internally generated revenue, reduce incidences of robbery and also to reduce the amount of cash payment while encouraging electronic payments.
This was because the cost of cash and associated risk of a cash-driven economy to Bangladesh’s financial system was high and increasing.
The initiative, according to the experts, is expected to bring about efficiency in the payment system.
