By underpinning the services to enable funds to be transferred between people and institutions, payment systems play a vital role in a country’s financial system. In formulation of an efficient payment system bank remain as the core of this system. The contribution of a bank to bring maximum number of people under financial inclusion actually laid the foundation of financial stability and economic growth of a country. Banks mainly uses traditional channel (e.g. cash, cheque etc.) and alternative delivery channel (e.g. cards, digital banking etc.) to leverage financial services among its clients.
When we talk about payment system, there are two main questions to be addressed – “How to pay” and “Where to pay”? During the time of digital transformation of Bangladesh, this is high time to focus on digital payment and transaction. Going by the trend, the dependency on cash, however, will change by the time the economy matures. Considering the growing number of digital payment initiatives by financial we are observing some positive signs in this direction. Still we, in the growing phase of financial inclusion it is required to invest more in alternative fund transferring channels to make the ecosystem more efficient.
In order to be aligned with the payment system of the digital transformation of the economy we have to focus more on the innovative ways to pay. But for a sustainable digital payment system we need to consider some complications that exists about availability, security and trust. Because at the end of the day customers have to have the confidence in the newly incorporated payment system. Besides, a mass-awareness is highly required to shift the behavioural affinity from cash to electronic payment mechanisms.
The digital business of Bangladesh is expanding day by day due to the growing popularity of eCommerce business. Bangladesh ecommerce sector is passing its major growth phase of its lifecycle. The digital transformation ecommerce offered significantly changing the shopping habits of country people, but from my understanding, the whole sector is lacking digitalization of its transaction. An eCommerce business makes sense when the entire procedure from searching product to making transaction is being carried out through online platform. But unfortunately, a true digital revolution is yet to take place because of the domination of Cash-on-Deliver (COD) eCommerce ecosystem.
Currently, 95% of ecommerce transaction happens on cash on delivery (COD) basis followed by bank/wire transfer (2 percent), bKash (2 percent), and credit cards (1 percent). The COD is not only making payment collection risky but also eventually increases the length of cash conversion cycle of the merchants. As COD is a bottleneck for the proliferation of ecommerce sector of Bangladesh, We need to incorporate innovative ways in the digital transaction domain. One of such innovation can be of QR based payment solution for online shop. As we have seen very sharp growth in the mobile phone and smart phone industry in Bangladesh, I believe QR based payment system will be a good catch for us.
The volume of e-commerce business will get bigger in near future as the penetration of smartphones usages is remarkably high in Bangladesh. With eCommerce growth, it is imperative to create a robust infrastructure that facilitates innovative payment solutions. The evolution of payment system would never stop as it is a continuous process. With the access in global information system through internet, Bangladesh becomes more integrated with the digital transformation all around. We need to ensure that our banking population has unfettered access to the online business benefits and vice versa. To ensure a true digital transmission, the right set of infrastructural framework with smooth implementation and management is required.