Tuesday, May 07, 2024
City dwellers, who used to do their festive shopping with cash, are now increasingly leaning towards debit or credit cards for transactions. An increasing number of card holders are also using their credit cards to take out consumer loans, and handle expenses abroad.
Moreover, the use of different types of prepaid cards is making the lives of consumers much easier. For example, to travel on Metrorail, commuters can use prepaid cards to get rid of the ticket collection hassle.
Such cards can also be used to pay bills for utilities such as gas, electricity or water supply.
Propelled by the Covid-19 crisis-time restrictions, the consumer use of these cards has been increasing day by day, especially among the younger generation.
Compared between the pandemic period and last year, plastic card transactions jumped three fold, which is helping the country move gradually towards a cashless society, and supporting the “Smart Bangladesh” goal.
According to latest data from the Bangladesh Bank, monthly transactions from debit, credit and prepaid cards, POS and E-commerce, ATM and CRM jumped from Tk 33,532 crore to Tk 90,432 crore compared from December 2019 to December 2023.
Such transactions continued their rising trend throughout January this year.
The number of cards also increased significantly in the last five years. There were 4.21 such cards until December last year, where 3.46 crore were debit, 51.21 lakh prepaid and 23.98 lakh credit cards.
Card transactions shot up in recent years mainly due to the rise in e-commerce businesses and foreign travels, said industry insiders, adding that it gained further momentum amid the pandemic.
Speaking to The Business Post, Prime Bank Chief Technology Officer AYM Mostafa said, “Since Covid-19 pandemic customers are more aware about technology than before. Besides, good banks are also leaning towards alternative transactions, as it reduces their costs.
“On the other hand, due to the role of the regulator, merchants are also accepting more cashless transactions than ever before. Due to these reasons, card-based transactions have increased significantly compared to previous years.”
Transactions through different cards
The number of debit, credit, and prepaid cards as well as transactions through them also increased in recent years.
Between 2019 and 2023, monthly transactions via debit cards rose by 164.5 per cent to Tk 41,752 crore, credit cards by 117.6 per cent to Tk 2,917 crore, and prepaid cards by 191.48 per cent to Tk 441 crore, as per the central bank data.
Besides, at the end of last year, the number of debit cards stood at 3.46 crore, prepaid cards stood at 51.21 lakh and credit cards at 23.98 lakh.
POS transactions are also increasing due to advancement in technology. At the end of 2019, where such monthly transactions was Tk 1,658 crore, it jumped by 88 per cent to Tk 3,114 crore at the end of 2023.
Apart from this, the number of ATM and CRM transactions is also increasing to avoid the hassle of withdrawing money from the bank.
ATM transactions have doubled in the last five years. At the end of 2019, where such transactions reached Tk 14,704 crore, it increased to Tk 28,380 at the end of 2023.
Meanwhile, the monthly CRM transactions increased from Tk 243 crore to Tk 12,295 crore between 2019 and 2023, according to latest central bank data.
Monthly E-commerce transactions boomed from Tk 262 crore to Tk 1,563 crore between 2019 and 2023, due to the change in customer habits and interest in using the technology during the pandemic.
A number of bankers say most banks are now adopting digital payment systems, including QR code payments, as part of their cashless payment campaigns, which has helped boost card transactions.
AYM Mostafa said, “Banks are also making the technology more user-friendly, as well as increasing security. As a result, card transactions will boom in the near future.”
Bankers also say the reopening of the tourism and travel industry after the pandemic is another reason behind the growing card transactions. Foreign travels picked up when the pandemic subsided and travel bans were withdrawn.
BB cashless campaign
The Bangladesh Bank in January last year started a campaign titled “Cashless Bangladesh.” Ten banks, three mobile financial services (MFS) providers, and three international payment service providers (PSP) are involved in the initiative.
As part of this move, they initially equipped many micro traders and street vendors in the city’s Motijheel area with QR code payment systems, including the owners of tea stalls, grocery stores, and eateries, as well as cobblers, fruit sellers, and hawkers.
The campaign aims to popularise the interoperable QR code payment system across Dhaka city, and bring hundreds of thousands of small businesses, including those owned by lower-income groups, under the digital transaction system.
