The award, which is now in its second year, coincided with the 7th anniversary of the American payment service provider’s setting up shop in Bangladesh
In India, the shock demonetisation in November 2016 provided the big bang that the country’s digital payment providers needed to further their agenda.
Across the border, that push seems to have come from the coronavirus outbreak in March this year, with the use of digital payments soaring for everything from groceries to utility bills, lifestyle purchases to food delivery, rides to sacrificial cattle.
And Mastercard on Saturday recognised 17 of its partners for their contribution in furthering the digital payment agenda in 2019-20, particularly during the pandemic, by way of creating innovative solutions and delivering accomplishments in various areas of business growth.
Called the ‘Mastercard Excellence Awards 2020’, the virtual event felicitated 10 banks, one non-bank financial institution, one payment gateway and four partner merchants across 11 categories for their top performance.
The award, which is now in its second year, coincided with the 7th anniversary of the American payment service provider’s setting up shop in Bangladesh and the 29th anniversary of its partnering with local banks.
Mastercard along with Visa have the lion’s share of the card market in Bangladesh.
The pandemic has fast-tracked the digital transformation for payments as people avoided handling banknotes for fearing of catching the virus, which has so far killed 6,544 and infected 458,711 in Bangladesh, according to Syed Mohammed Kamal, country manager of Mastercard.
“People who have never paid a bill online are doing so now, people who have never bought groceries online are buying online,” he told Dhaka Tribune on Saturday.
However, the digital payment platforms did not get off to a flying start straightaway: the countrywide shutdown enforced by the government from March 26 to May 30 to flatten the curve on coronavirus slammed shut almost all economic activities and with it the business of the platforms nosedived.
Mastercard extended a host of offers in partnership with banks, merchants, payment gateways and brands during the pandemic to get people to pay with cards.
“March was okay. April was bad, as economic activities slowed almost to a halt. We came back strongly from July,” he told Dhaka Tribune yesterday.
In April, card transactions stood at Tk 8,920.7 crore, the lowest since December 2018 at least, according to data from the Bangladesh Bank.
In that month, transactions on the mobile financial service platform, another form of digital payment, was the lowest since February 2018 at Tk 29,029.1 crore.
Transactions on the internet banking platform too were the lowest since February 2019 in April.
A significant chunk of the card business comes when customers travel abroad and all forms of international travel have been on hold for the pandemic save for the odd essential trips here and there.
“That business has come down to zero. So if you consider the numbers from July onwards, they are pretty impressive and those only show people are genuinely getting used to digital payments.”
The challenge now is getting the people to continue with the newly-acquired habit and not revert to cash once the virus, which has made people wary of close interpersonal interactions, is extinguished.
Kamal called for a 5 per cent incentive -- similar to the one remitters get for sending money home through the official channel -- to convert it into a lifelong habit.
“The government should push digital payment for Bangladesh.”
Of the 5 per cent incentive, 3 per cent would be for the customers and 2 per cent for the merchants.
Mastercard has taken up the issue to the central bank, the Bangladesh Association of Software and Information Services, the banking secretary and the Information and Communication Technology division. All have responded favourably to the proposal.
“It is up to the ICT Division to see this through.”
Going forward, Mastercard, which Kamal says is logging in “significant” growth in the market thanks to its partnership with 20 banks, wants to scale up Bangla QR, its brainchild; contactless payment; and push for more financial inclusion.
“Financial inclusion is in our DNA,” Kamal said, adding that the New York-based payments technology company is keen on innovation too, such as the Bangla QR code.
The option of making payment using the interoperable quick response (QR) code, a two-dimensional code made up of black and white squares that can be read by smartphone cameras, has been around for a while in Bangladesh thanks to bKash, Dutch Bangla Bank’s NexusPay and Rocket, United Commercial Bank’s Upay, among others.
The customer needs to scan the QR code display, typically found at the cash register, and the money would be transferred from his/her account to the merchant without the need to swipe one’s bank card at the point-of-sale terminal.
But the problem with these is that the merchant needs to display the QR code of all these vendors separately, which makes the till rather visually cluttered.
So in March 2018, Mastercard proposed to the central bank to come up with a unified QR code that can be used by all, Kamal said. Subsequently last year, the BB rolled out the Bangla QR code, an interoperable QR payment system that can be used by all banks, card providers, MFS operators, payment gateways and merchants.
“Mastercard fully supports the vision of the government to build a Digital Bangladesh by 2021,” said Porush Singh, its division president for South Asia, at the virtual award ceremony, which was attended by Salman F Rahman, the Prime Minister’s private sector development industry and investment advisor.
For instance, Kamal said Mastercard ushered in interoperability in Bangladesh by allowing money transfers to and from bKash wallets and bank cards last year, in what was yet another baby step towards a Digital Bangladesh. A similar deal was struck with Nagad this year.
“This year has been exceptional, and Mastercard is thankful for the partnership and commitment demonstrated by all stakeholders to achieving uninterrupted commerce, even during the months of lockdown,” Singh said.
Mastercard remains committed to its partners and will continue to work in collaboration with them and other local stakeholders to create a safe, secure and seamless payments ecosystem in the country, he added.
Vikas Varma, chief operating officer of Mastercard South Asia, was also present at the virtual ceremony as well as senior officials from partner banks and financial institutions.