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Bank has approved the launch of an electronic prepaid card system
that will have a mobile payment option. The central bank permitted
Trust Bank Ltd to act as a settlement bank for digital money
transfer. "The Electronic Prepaid Card System will be a multiple
bank, multiple channel platform, where Trust Bank will act as the
settlement bank," BB said in a recent notice. With the card, a
customer will be able to deposit and withdraw cash directly from
ATMs and all other channels. A card will have a secret PIN to access
the service. Also, the system allows an authorised user to transact
by mobile. In case of foreign remittance, any amount could be
withdrawn by prepaid card, but the amount is limited to a maximum of
Tk 10 ,000 for now, Bangladesh Bank officials said. In line with the
central bank directive, any bank having Q-cash or a similar platform
can issue prepaid cards for customers to transact money. Presently,
23 banks are linked with the Q-cash network. Besides the prepaid
card system, Eastern Bank received approval to handle international
and domestic remittance transfers. Dhaka Bank is allowed to disburse
foreign remittance through mobile operator Banglalink's outlets.
Neither of the new systems allows cross- border money transfer.
Industry insiders said people would be able to easily transfer money
to their loved ones at a fifth of the cost under the present system.
According to BB statistics, remittance inflows soared by 30 percent
from $ 721.92 million in August 2008 to $ 937.91 million in August
2009 -- a contribution of 60 lakh Bangladeshis living in parts of
the world. In a letter on September 1 , the central bank approved
Trust Bank to introduce the Digital Money Prepaid Card System with
mobile payment facilities within the next six months, in association
with Digital Technologies Ltd and Information Technology Consultant
Ltd. Under the digital money transfer system, intra- and inter-bank
account-to-account transfers, transactions at ATMs through Q- cash
and other similar platforms will be settled. A digital wallet is an
electronic prepaid card with mobile banking (M-banking) that utilises
the ATM (automated teller machine) and all kinds of electronic
communication technologies, including mobile phone. To obtain the
digital prepaid card, customers will have to fill out an application
form at banks or agents. The bank will verify the customer under its
'know your customer' ( KYC) process to issue a digital money prepaid
card. The customer's information must match the information with the
bank and the information he or she provided to telecom companies,
through host-to-host connectivity. The Q-cash host will tag the
cardholder's cellphone upon getting confirmation from the telecom
host, and then the customer will be notified immediately upon
successful digital money tagging. Since the customer owns the card,
he or she can transfer money and carry out transactions at a point
of service (POS) at bank-approved merchant stores and service
points, like gas stations, hospitals and cinema halls. In the case of
person to business payments, like utility bills, insurance premiums,
loan instalments, E-top-up for mobile phones, and e-ticketing, the
prepaid card will be used. In the case of government to person
payments, like agriculture subsidies, widow allowances, freedom
fighters allowances, payment will be transferred through the card.
Trust Bank will have to submit contract agreements between its
partners before launching the project. The pay points must be
accredited by Trust Bank under an approved accreditation policy and
the bank shall undertake all responsibilities of pay points. Trust
Bank will be responsible for mitigating of all kind of risks,
including credit risks, liquidity risks, operational risks, fraud
risks and technical risks associated with the digital money system.
Kazi Saifuddin Munir, managing director of Information Technology
(IT) Consultants Ltd, said, "We are ready to initiate the prepaid
card system for money transferring by December on a pilot basis." IT
Consultants Ltd, the lone payment service operator in Bangladesh
providing the Q-Cash inter-bank switching platform and connectivity,
thinks that if all the banks come under a single network, remittance
or any other transaction would be easier. Munir said through a
designated short mobile code number, a customer can transact money.
However all transactions would be settled through the banking
channel. "The mobile application will be used to just enter the
system," he said. Banking and mobile application systems will be
merged in a sense to settle the transaction. As per the central bank
notification, Eastern Bank Ltd (EBL) will conduct both international
and domestic remittance by introducing three products --EBL Smart
Remit Card, Smart Cash Point and Smart m- wallet. The EBL Smart Remit
Card will be a card based payment system, where senders can send
money to receivers prepaid VISA card and the cash can be withdrawn
using any VISA, ATM or point of service, at any appointed merchant.
EBL has not been approved transferring money from one m-wallet to
another m- wallet holder. Dhaka Bank Ltd has been approved to use
Banglalink outlets for disbursement of foreign remittance. Under the
approval, the bank can disburse foreign remittance through designated
Banglalink outlets, which must be approved by the bank's board. In the
remittance disbursement process, EBL and Dhaka Bank accredited cash
points will be used only for delivery in local currency for inward
remittance credited in Nostro accounts of the banks and not for any
other inland or cross border transfer.
