The TakaPay Card scheme introduced by Bangladesh Bank aims to reduce the annual fees for customers who use debit cards and minimize the continuous dollar spending by local banks on international institutions like Visa, MasterCard, and UnionPay.
In November, the central bank is set to officially launch this domestic debit card program in collaboration with eight designated banks, namely, Brac Bank, United Commercial Bank, City Bank, Sonali Bank, Eastern Bank, Islami Bank, Dutch-Bangla Bank and Mutual Trust Bank.
Paris-based global consultancy firm Fime has already been assigned to prepare the card, similar to the Visa and Mastercards. They had signed a six year partnership with Bangladesh Bank, as per which they will provide consulting and testing services, and set up a certification body framework.
Domestic card schemes refer to payment systems where both card issuance and merchant acceptance are primarily limited to a single country. Card schemes are networks associated with payment cards, such as debit or credit cards, and any eligible financial institution, including banks, can join these networks. By becoming a member of such a scheme, financial institutions gain the ability to issue cards and accept payments from merchants within that scheme's network.
Currently, banks in Bangladesh rely on International Payment Schemes (IPS) like Visa, Mastercard, Amex, JCB, Discover, and Union Pay to provide essential customer services, including handling and settling debit and credit card transactions.
As a result, the number of cards issued, transactions as well as dependency on those international institutions are rising.
Banks in Bangladesh have to pay huge amounts of fees in foreign currency to foreign institutions to avail of these services.
And the customer has to bear this cost as annual card charges.
Currently, banks are providing various quality debit cards to customers, such as Classic, Platinum, Signature (Regular) and Signature Priority.
Banks are charging Tk500 to Tk600 for classic cards annually. Tk700 to Tk800 for platinum card, Tk800 to Tk900 for signature regular and Tk1000 to Tk1500 for signature priority customers.
As such, bankers think that Bangladesh Bank's TakaPay card will reduce not only the bank's operation costs but also the customer’s card fees.
They also believe the new payment scheme aims to compete in the domestic market with other international payment schemes like Visa, MasterCard, UnionPay, etc.
Selim RF Hussain, managing director of Brac Bank, said: “An independent and sovereign card is essential in the current geopolitical situation.”
“Now we have to pay fees and charges to international payment platforms for settling transactions. As a result, a large volume of foreign currency goes to them. If we can introduce the card, that foreign currency will be saved,” he explains.
He also said services from Visa and MasterCard come with very high fees, which affects customers. Therefore, if Bangladesh Bank can start this service, the customer's cost will also decrease.”
Currently, Indian “RuPay”, Pakistan's “PakPay”, Sri Lanka’s “LankaPay” and Saudi Arabia’s “Mada” are national card schemes.
As a result, reliance on and use of national card schemes in those countries has increased in their local card markets and they are saving foreign exchange by reducing dependence on International Payment Schemes (IPS).
Mezbaul Haque, Bangladesh Bank spokesperson, told Dhaka Tribune: “Preliminary pilot activities for a national debit card which we are calling TakaPay are currently underway in collaboration with eight banks.
“Bangladesh Bank will initially introduce it for domestic use, with plans to later unveil the Taka-RuPay card in November later this year," he added.
Approximately 2.2 million Bangladeshis travelled to India on tourist visas in 2017. In 2022, Bangladeshis received 1.5 million visas from the Indian High Commission in Bangladesh.
If this card is launched, then converting taka to dollars and then dollars to rupees will be reduced by 6%. Cardholders will have the comfort of spending up to $12,000 in rupees during their trips to India.
