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Evolution of Money and Advancements in Payment Technologies in the world and in Bangladesh

Evolution of Money and Advancements in Payment Technologies across the World

PART 1

It is believed that ten to twenty thousand years ago, human beings started exchange of goods as a form of trade. This kind of trade is widely known today as the barter system where you exchange your cattle for crops, fish for meat, etc. This remained as the only way for trading until two to three thousand years ago when precious metal coins became the popular way of monetary exchange in trading and commerce. It has only been a few hundred years since we have been using the paper based currency which is widely used today. From paper currency, we have invented banks, cards, e-commerce, mobile money, digital wallets and now crypto currencies.

In the Middle Ages, Italians used to conduct their commercial transactions while sitting on the bench (‘banco’ in Italian). Later, this very word ‘banco’ underwent changes and became ‘bank’. The modern banking system started in Venice in 1587, and in the same year the “Banco di Rialto” was established. People could deposit money in this bank and could draw when they needed it. In 1619 ‘Banco di Giro’ took Bank Cheque over the management of this bank. People could deposit even their gold and silver items in this bank for which the bank issued receipts. These receipts were used as currency notes which was the earliest form of paper currency in the world. Now, almost all the countries of the world have paper currency backed by banking systems.

Not only we have seen the evolution of financial services, we have also seen huge strides in technology in the last few decades. The use of technology in trade and commerce has also changed human lives immensely. There has been numerous innovation and continuous disruptions happening in the payment technologies starting with cards, e-commerce, mobile money, digital wallets, etc. The most commonly used online payment mode so far have been the use of plastic cards. Nowadays many banks are also enabling their cards for online transactions. One of the major advantages of using the cards is their easy to use functionality for making online transactions in no time and from anywhere. These cards are easy to obtain and use as customers don’t need to purchase any extra software or hardware to use them. The plastic cards first changed how people interacted with banks in the 1940s-70s; started to withdraw money using Automated Teller Machines (ATMs) using cards systems and then came the age of credit cards first introduced by Diner’s club in USA, shortly joined by American Express and BankAmericard which later became Visa. In the 1990s, the Point of Sales (POS) started to accept card through POS terminals and people started using their cards at merchant points which popularly came to be known as a Card Present (CP) transaction. The credit card companies introduced a new ecosystem in the payment card industry where some banks issued plastic cards to customers and some banks accepted card transactions through deployment of POS terminals at merchant points. Later, this model was also replicated for provisioning online transactions in the e-commerce industry. Cardholder authentication procedure used to be very simple, with the provision of a name, credit card number, and expiry date. Cards would have a magnetic strip on one side which could be easily swiped at a POS terminal. However this simplicity of the card usage also resulted in creation of cyber criminals who tried to attempt frauds by stealing card information from online, merchant points and ATMs. To prevent stealing of card information, card companies came up with a new standard for issuing and acquiring of the plastic cards, which is called EMV technology. EMV gets its name from the credit card issuers that founded this standard: Europay, MasterCard and Visa. They started working on EMV in 1993 and were later joined by Discover, JCB, UnionPay and American Express to form EMVCo. The first version of EMV came out in 1994, although it took a few years before it saw widespread use across Europe. An EMV card is characterized as a smart card, with an integrated chip that interacts with POS systems for authentication.

In the 1980s-90s, the development of the IT and telecom infrastructure fostered further digitalization in the payment processes by providing a variety of electronic payment options apart from plastic cards like mobile money, digital wallets, electronic cash, etc. In 1995, Amazon and eBay in USA completely changed the concept of buying and selling, using the power of Internet. Due to new technology adoption culture in the USA, within only few years, people there became used to the idea of electronic commerce (e-commerce) where you could easily purchase goods using a website over the Internet and pay through online transactions. The online transactions through credit cards came to be known as Card-Not-Present (CNP) transactions. For ensuring the security of consumers’ card being used online, credit card companies also developed a number of technology standards including MasterCard SecureCode and Verified by Visa (VbV), etc. These technologies at the payment ecosystem allowed users to create a password or use one-time password (OTP) as a second factor of authentication before using the card online; this is also referred to as Two-Factor Authentication (2FA) in the industry which helped reduce the number for fraud when transacting online through their credit cards.

Another form of CNP was Card-on-File (CoF) payments where your card details were saved by a service provider and it’s auto-debited based on certain bills. It was mainly used for paying the mobile phone bills in developed countries. In the year 1998, PayPal in USA reinvented the concept of money with their invention of electronic wallet (E-wallet) backed by CoF technology. Using PayPal, you could save your card data, transfer small funds from your cards and store them within a virtual account and later use that e-money to make purchases online. Around the same time when Amazon and PayPal was busy working for the advancement of the payment technologies in USA, Alibaba started it’s journey in China in 1999 which would later become one of the cornerstones of e-commerce industry not only in China but for the entire world.

While technology companies were flourishing in USA and Europe, countries in Asia and Africa were unable to tap into the opportunities of the fast evolving Information Technology (IT) age. However, some of the developing countries in Asia and Africa saw a different form of revolution in payment technologies through Mobile Network Operators (MNOs). Payments made through wireless network via mobile devices are thought to provide more convenience and reduce the cost of trade. The mobile technology also made it easier for businesses to collect payments from their customers against purchases without handling cash. The applicability of mobile payment systems is quite wide due to the remarkable growth and greater penetration of mobile devices as compared to other ICT infrastructure specially in Asia and Africa. Mobile payment methods are also suitable for offline micropayments as well as for online purchases. In Philippines, we saw the sudden rise of telecom powered M-commerce platformSMART Money launched in 2001 as the world’s first mobile money platform. One of the major reasons behind the success of SMART Money was its backing by the central bank of Philippines- Bangko Sentral ng Pilipinas (BSP). BSP was one of the key contributors to SMART Money’s success by letting the telecommunications and digital services provider Smart Communications experiment with new delivery models for payment services. This was a rare quality in a financial regulator to allow an MNO to operate in the financial industry. In particular, BSP allowed non-banks to offer financial services, which enabled SMART Money’s agent network to flourish. Know Your Customer (KYC) rules were also relaxed so that consumers only ever had to show ID once, when they signed up for the service. Similarly, M-Pesa launched in 2007 by Safaricom, an MNO in Kenya, became the most successful mobile-phone-based financial service in the developing world by 2010. The initial concept behind M-Pesa was to create a service for allowing microfinance borrowers to easily receive and repay loans using the network of Safaricom airtime resellers but this quickly captured a significant market share for cash transfers and grew to 17 million subscribers by December 2011 in Kenya alone. It has since been expanded to Afghanistan, South Africa, India, Romania and Albania. M-Pesa allows its users to deposit, withdraw, transfer money and pay for goods and services easily with a mobile device. Most of these mobile money platforms heavily relied upon telecom technologies such as Short Message Service (SMS) and Unstructured Supplementary Service Data (USSD). These telecom based technologies were not built for services like mobile money so their unreliability became a challenge for the providers to scale up and maintain quality of the services. However, these platforms eventually provided millions of people access to the formal financial system and helped reducing crime in otherwise largely cash-based societies, specially in Africa. Since their rise, many have tried to replicate and remodel these mobile money concepts in other countries, some achieved great success like iD DCMX in Japan, Union Pay and Alipay in China while many others failed. This competition of copy-cat continued for a while around the world until another disruptive innovation was just waiting to emerge which would end up changing the payment industry yet again.

In the new millennium, wider adoption and usage of PayPal started a hype in the world that resulted in launching of multiple electronic wallets similar to PayPal everywhere. Apparently, there were some electronic wallet project running in every continent. Some wallets offered digital coupons, some offered digital money, digital cards, digital receipts, etc. Electronic Wallet is actually a virtual storage of funds which can also store payment card information through an electronic account accessible via a Personal Computer or a mobile device. Accessing electronic wallets via mobile phone also came to be known as Mobile Wallets. These wallets provide a convenient way for a customer to make in-store payments and can be used at merchants enrolled with the wallet service provider.

With the increasing trend of adoption of e-commerce and online transactions, the number of online fraud also rose. The payment card companies started to introduce various new technologies in payment to protect consumers from fraud. In the year 2006, American Express, Discover Financial Services, Japan Credit Bureau, MasterCard Worldwide and Visa International formed the Payment Card Industry Security Standards Council (PCI SSC) with the goal of managing the ongoing evolution of the Data Security Standard. The council itself claims to be independent of the various card vendors that make up the council. It introduced various global standards for merchants and service providers in order to protect consumers from fraud and data leakage. One of the most recognized is the Payment Card Industry Data Security Standard (PCI DSS).

With the innovation of iPhone in 2007, Apple showed the world what kind of power technology can unleash to the world. With the advent of smartphone age, the payment ecosystem was waiting to reinvent itself through mobile apps. With the free offering of mobile operating system- Android from Google in 2008, a smartphone revolution started happening worldwide. This revolution crashed once king of the mobile handset manufacturers- Nokia. It is still hard to believe that even just ten years ago, Nokia had a market share of close to 50 percent handsets around the world. With the rise of smartphone age, Electronic Wallet service providers started to allow their customers to install an application (app) from different mobile platform stores such as, Google Play/Apple Store to drive early adoption and usage for online and offline purchases.

Around the same time, e-commerce was on the rise in China through Alibaba, JD.com, Tencent, Baidu, etc. With the rapid growth of Internet users, e-commerce had become the new trading channel for many businesses and individuals in China. The “brick and mortar” retailers recognized the advantages of e-commerce and began to add such capabilities to their websites, marking that e-commerce has entered into the sustainable development phase. In 2007, China’s online retail trade reached $8.3 billion. The drastic influence e-commerce had on Chinese economy gradually extended to the supply chain links, logistics, online payment and other supporting services. In 2008, ‘e-population’ in China topped 253 million, which surpassed the US for the first time and became the country with the highest number of Internet users. In 2009, Alibaba initiated its sales day on Nov 11 and generated sales of $7.35 million with only 27 participating sellers. With the convenience, safety, and friendly user experience of e-commerce having improved tremendously, in 2013, China surpassed the US and hosted the largest online retail market in the world. In our neighboring nationIndia, the online e-commerce revolution first started with the introduction of booking train tickets through Indian Railway Catering and Tourism Corporation (IRCTC). Later on, Flipkart and Snapdeal started to develop the e-commerce market further through selling of fashion, lifestyle and electronics goods online. These e-commerce companies helped the payment industry in India to grow. Despite being a developing country, India has shown a commendable increase in the e-commerce industry in the last couple of years, thereby hitting the market with a boom. Though the Indian online market is far behind the US and the UK, it has been growing at a fast pace.

With the rise of smartphone penetration, a new concept of POS terminals came to the payment industry in the form of Mobile POS (mPOS) in 2010s. mPOS is essentially a smartphone, tablet or dedicated wireless device that performs the functions of an electronic Point of Sale (POS) terminal. mPOS solutions let us harness the power of a smartphone or tablet to accept payments on the spot. From providing services at the customers’ homes to doing business at tradeshows, flea markets, sports venues or food trucks and much more; it’s easier with an mPOS. mPOS devices were extremely disruptive when they first debuted in the North America like Square, PayPal Here, Control mPOS, etc. because they provided a sleek and easy way for all merchants to accept card payments. Today in North America and Europe, consumers expect merchants everywhere to accept cards so mPOS terminals have become an important element in the payment ecosystem picture.

In 2009, another revolution in currency was brought by Bitcoin which was the first crypto currency in the world. Crypto currency is a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank. Here it is a completely new type of money which is different from the paper currency or bank controlled money. It is even quite different from various formats of e-money which we have discussed above. In all kinds of formats of money and payment technologies discussed so far has no similarity to crypto currencies. Crypto currencies are designed using a technology architecture called the Blockchain where no central authority is required to regulate the money flow or settle payments. In the crypto currency ecosystem, the payer and payee exchange value directly in the form of units of crypto currency. Following the footstep of Bitcoin, there are a multitude of crypto currencies in circulation today. In a contrasting manner, some countries are banning or discouraging usage of crypto currencies while some other countries are adopting blockchain by converting their national paper based currency to crypto currency like in Tunisia and Senegal. Only time will tell in which direction the crypto currency’s fate will go.

As all existing and new payment service providers and ecosystem players started to adopt to the smartphone platforms, the smartphone ecosystem players such as Apple, Google, Samsung, and others started to offer their version of mobile app based payment technologies in 2014-15 where you no longer needed to carry physical plastic card rather you could use the digital version of your card to do online transactions using your smartphone. These payment systems were also backed up by Card-on-File (CoF) technology which was reinvented in the payment industry. Some of these wallets, including Apple Pay and Samsung Pay, rely on Near Field Communication (NFC) technology. This technology allows customers to make a purchase just by holding their phone to an NFC supported POS terminal. It’s not only convenient but it also drastically speeds up the time that customers spend in the checkout line. Also, since most electronic wallets require two-factor authentication, processing payments via NFC is more secure for customers. As for merchants, accepting such wallet payments is fast, and it is an affordable payment option. In near future mobile payments via electronic wallets will become more widely accepted. Businesses of all sizes and consumers will steadily move away from carrying around plastic cards. A new technology similar to NFC is Bluetooth Low Energy (BLE), which takes place on either the consumer or merchant’s device where data is stored in a electronic payment account accessible via smartphone. Examples include PayPal’s beacon and iBeacon from Apple. Merchants in North America are using BLE and NFC that connect the mobile devices with either BLE beacons or NFC tags. With BLE, the transmission is continuous and can be used in large areas whereas NFC is more proximity dependent. So BLE might be adopted more than NFC where customer’s proximity is a challenge while receiving payments.

With the invention of new technologies such as Quick Response (QR) code which could be scanned and read by smartphone cameras, the receiving side of the payment technologies started to change drastically. QR code is the trademark for a type of two-dimensional barcode which was earlier known as matrix barcode. It was first designed for the automotive industry in Japan by Denso Wave; surprisingly even the text “QR Code” is a trademark and copyright of Denso Wave. Its purpose was to track vehicles during manufacturing; it was designed to allow high-speed component scanning. This is essentially a machine-readable optical label that contains information encoded into it. The QR code became popular outside the automotive industry due to its fast readability and greater storage capacity compared to standard UPC barcodes. Its applications originally started with product tracking, item identification, time tracking, document management, and general marketing. Later on QR was being adopted to an wider area of applications such as, you could use it to contain your contact information, embed an online website’s URL, and accept payments, etc. QR codes were used to store bank account information or credit card information, and applications were being designed to work with particular payment provider in Japan, China and also in Europe. There are now several applications of QR code payments across the world. In India, the financial technology (fintech) company- Paytm, launched in 2010, adopted the QR as a de facto standard to receive payments from customers at merchant counters. As more fintech companies started to adopt the QR for facilitating payments, BharatQR was developed by NPCI, Mastercard, and Visa, as an integrated payment system in India in the late 2016 which facilitates users to transfer money from one source to another. The money transferred through BharatQR is received directly in the user’s linked bank account. It provides a common interface for American Express, Visa, Mastercard, and RuPay cards in India. As opposed to other such systems, used by private companies and banks, BharatQR is interoperable with all the banks. With demonetization of popular currency notes by the Indian Government in 2016, the usage of electronic wallets and e-commerce has risen exponentially. This wind of change in the Fintech is altering how, where and when payments are made as well as who is facilitated as we continue to further explore and leverage available technology for making payments. In the African continent, the payment technology company Visa launched it’s mVisa product in Nigeria in 2017 to challenge its African competition M-Pesa. The mVisa platform is designed for both smartphone and feature phone users, an attempt by Visa to promote financial inclusivity. To make a purchase, smartphone users will scan a QR code available at the point of sales and then input the amount to be deducted. After sanctioning the sale, the merchant will be immediately notified of the completed transaction. Feature phone users will be able to do this using USSD codes. Among many other payment service providers, Visa is also betting high on QR code technology through its mVisa product. Interestingly, as the cards being virtualized, the payment card industry is now rephrasing the terms CP and CNP as Consumer-Present and Consumer-Not-Present. So it is evident that in near future, payment cards may be of a different format than how we see them today.

With the rise of technological advancement in artificial intelligence, machine learning, and sensors, the E-Commerce giant Amazon started a revolutionary and cutting edge business combining traditional brick and mortar and technology to launch a Grocery Store called Amazon Go. The difference between your typical grocery store and Amazon Go is it only looks like a grocery store but its operational and checkout technology is completely unprecedented. The first Amazon Go store is currently operational in one location in Seattle, Washington since January 22, 2018. Customers are able to purchase products without using a cashier or checkout station.

Using the QR code, NFC and BLE technologies, mobile payment services with their increasing popularity are presently under the phase of transition, heading towards a promising future of tentative possibilities along with the innovation in technology. With all the security and convenience provided by mobile payments, we can expect further growth of mobile payments worldwide even surpassing payments made by credit and debit cards. Even the technology behind Amazon Go will only enhance as time goes by and where it will lead payment technologies is unimaginable right now. The way we pay for things is changing, fast! Digital Payments is gradually taking over the traditional method of cash based payments, literally.

PART 2

Payment Technologies in Bangladesh

After the Liberation War and the eventual independence of Bangladesh from Pakistan in 1971, the Government of Bangladesh reorganized the Dhaka branch of the State Bank of Pakistan as the central bank of the country, naming it Bangladesh Bank. This reorganization was done pursuant to Bangladesh Bank Order, 1972, and the Bangladesh Bank came into existence retroactively from 16 December 1971. The popular currency of Bengal was called ‘Taka’ which had a long history and heritage predating the Liberation War. However until 1971, the Pakistani rupee had bilingual inscriptions in Urdu and Bengali, and was called both rupee and taka. The Bengali Language Movement in 1952 played a decisive role in ensuring the recognition of the taka in East Pakistan. The Bangladeshi taka in its present format is the currency of modern Bangladesh. It was officially introduced in 1972 by the Bangladesh Bank following the end of the Bangladesh Liberation War and is produced by The Security Printing Corporation (Bangladesh) Ltd. The Bangladeshi taka carries the symbols ৳ and Tk. It is the second most valuable currency in South Asia, when pegged to the US Dollar, after the Indian rupee.

Since 1972, Bangladesh had gone through huge struggles and challenges to establish a good economy in the country. Although there were banks established from the beginning but their adoption to the latest technologies remained pretty slow. The card technology was first introduced to Bangladesh in the 1990s by ANZ Grindlays Bank which was later acquired by Standard Chartered Bank in middle of year 2000. Although Cards have been here for more than two decades, its adoption and penetration still remains very low. At present there are only about 11 million debit cards and approximately 1 million credit cards. Over 80 percent of the nearly 1 million credit cards in the market are in Dhaka and Chittagong. The number of ATM booths is only 9500 while the number of POS terminals is only 37,000 where cards are accepted as a form of payment. One of the major reasons behind such low numbers is most of the country’s urban activities and lifestyle expenses are highly concentrated in only two cities- Dhaka and Chittagong. Another reason is lack of banking infrastructure built by the local banks in rural parts of the country. A vast area of the country still remains largely untapped by the banks for acquiring of card customers. Due to not having enough cards, penetration of POS terminals at merchant locations also remain very low. According to some bankers, regulation and investment are two major factors for the lack of card penetration in the country. To avail a credit card, a person must have a Tax Identification Number (TIN) which is a strong barrier to the growth of plastic money or cashless transactions as many people are not tax payers. To build a strong banking infrastructure, it requires huge investments by the banks but the Return On Investment (ROI) is not attractive. Recently the rising cases of fraudulence and forgery using credit cards has become another major area of concern, which, according to many bankers, is hampering the growth of the card industry in the country. Although defying these challenges, one of the private sector banks started enhancing their reach with modern banking infrastructure in BangladeshDutch-Bangla Bank. Gradually many other technology pro banks started their own drives to cover Bangladesh through a network of ATMs and online branches.

Due to the lack of sufficient banking and payment infrastructure, regular trade and commerce is still largely based on cash. However, in recent times due to present government’s drive in building a Digital Bangladesh since 2008, significant progress has been achieved in the SMS Banking, mobile money, e-commerce and electronic payment sectors within a short period of time. A private company, SSL Wireless introduced SMS Banking services to Bangladesh and offered it to various banks.

Gradually many banks started to partner with SSL Wireless to implement the SMS Banking platforms. Due to progressive leadership of Dutch-Bangla Bank and private sector IT companies, late in the year 2009, Bangladesh Bank published a circular, which formally introduced the e-commerce industry in Bangladesh. Yet again, Dutch-Bangla Bank leading from the front collaborated with few IT companies to formally introduce e-commerce in Bangladesh. One of these companies was SSL Wireless. SSL Wireless, by partnering with Dutch-Bangla Bank, launched the country’s first merchant payment gateway service called SSLCOMMERZ, which was inaugurated by the Governor of Bangladesh Bank in 2010. Within the span of a few years, other technology pro banks such as, BRAC Bank and The City Bank partnered with SSL Wireless to acquire online merchants for accepting e-commerce transactions. Apart from cards, over time SSL has partnered with other banks and payment channels to bring wider coverage through Internet Banking and Mobile Financial Services (MFS) platforms for facilitating customers in online payments. SSL Wireless also partnered with Mobile Network Operators (MNOs) to introduce online recharge services to customers in 2011 through easy.com.bd portal. This move has further helped in popularizing e-commerce and online payments in the country. Within few years, SSL Wireless established itself as a pioneer in the fintech, e-commerce and payment services in Bangladesh. The domestic airlines companies also started to offer their ticketing services online by partnering with SSL and banks. Based on this movements, experienced and fresh entrepreneurs started brand new ventures to offer various services online, mostly leading by the tech companies. Their participation encouraged Bangladesh Association of Software and Information Services (BASIS) to collaborate with SSL Wireless and Bangladesh Bank to further enhance the reach of e-commerce in the country. SSL Wireless, Bangladesh Bank, and BASIS held regular talks, seminars and workshops to encourage entrepreneurs for coming to the e-commerce space. BASIS began working with the govt, specially with the Ministry of ICT as the national trade body for Software & IT Enabled Service industry of Bangladesh to further improve and expand the ecosystem of e-commerce and Payment industry. Following the rise of E-Commerce in Bangladesh, another trade body called e-Commerce Association of Bangladesh (e-CAB) started its operation and devoted itself entirely for the development of the Bangladeshi e-Commerce sector. e-CAB is also working with private companies, regulators, ministries and other relevant parties to create a collaborative environment among various stakeholders.

On the other hand, we have seen the humongous rise of Mobile Financial Services (MFS) in Bangladesh from the likes of bKash since its inception in 2011. bKash is operating under the authority of Bangladesh Bank as a subsidiary of BRAC Bank Limited. This mobile money system started as a joint venture between BRAC Bank Limited, Bangladesh and Money in Motion LLC, USA. bKash users can deposit money into their mobile accounts and then access a range of services, in particular transferring and receiving money domestically, making payments and buying airtime top-up. In April 2013, International Finance Corporation (IFC), a member of the World Bank Group, became an equity partner and in March 2014, Bill & Melinda Gates Foundation became an investor in the company. Fortune magazine ranked bKash among the top 50 companies in the list of “Change the World” in 2017. According to them, 22 percent of Bangladeshi adults use bKash with around 4.5 million daily transactions. Along with bKash, we have seen many other banks offering their own versions of MFS during the following years like UCash, OKash, MCash, etc. However, so far only Rocket, which is Dutch-Bangla Bank’s initiative in MFS, became one of the prominent drivers of MFS in the country along with bKash. Although most of these MFS started with local money transfer service, they are now gradually shifting focus in the payments space. However, MFS is still quite inconvenient for merchant payments due to its dependence on the cumbersome technology of USSD behind these platforms. So a shift towards the new smartphone based technologies are also seen in the market. We are now seeing upcoming platforms such as, Tap ‘n Pay, UPay, NexusPay, iPay, etc. being introduced in the market, all of which uses latest technologies to ease merchant payments. However, being dependent on smartphone technologies also leaves out a huge number of customers who are still using feature and bar phones. With the growth of smartphone penetration and increase of availability of Internet connectivity, we will see a wider usage of these latest payment platforms. For the advent of new technologies and sustenance of these platforms, Bangladesh Bank has to play a huge role by encouraging and assisting the growing Fintech industry, allowing them to bring new offerings and services to the local market.

In recognition of the increasing demand for enhanced user-friendly payment experiences among people as well as the growing role of fintech in the world of payments, banks are now-a-days exploring alliances with the Fintech companies, in order to expand their knowledge and understanding of developments in the payment industry.

We have discussed about the new form of Cashless Economy which is emerging globally previously. Although cash is currently the king of payment methods in Bangladesh and we probably won’t see it disappearing anytime soon. That said, the frequent trips to the banks or ATMs and running around for change while checking out at the grocery store or trying to pay the CNG driver is still greatly inconvenient. It’s no wonder that people are embracing new payment technologies and moving towards a cashless society.

In tune with digitalization of Bangladesh, SSL Wireless, one of the leading Software development, fintech, and IT Enabled Services (ITES) providers of Bangladesh, has implemented the technology of making financial transactions also QR code using mobile apps for the first time in Bangladesh. SSL has launched the first-ever mobile wallet platform, named ‘FastPay’, in a foreign land from Bangladesh. SSL has deployed FastPay mobile wallet platform in Kurdistan, an autonomous region in Iraq, under agreement with Next Generation Communication, a sister organization of Newroz Telecom group. Within a short time, FastPay has become Kurdistan’s quickest, most convenient, and safest mobile wallet for shopping, mobile recharge, money transfers and bill payments.

With its continuous efforts of bringing innovative and advanced technology solutions for the betterment of the people of the country, SSL has recently developed and launched another app called ‘ZPay’. ZPay is the first and only certified Card-on-File (CoF) platform in Bangladesh. It uses QR code technology to send payments to businesses online or offline. Customers can use ZPay for storing multiple card data and make payments using any of the stored cards while shopping or paying bills.

The ZPay app is integrated with the SSLCOMMERZ payment gateway, which enables the user to select multiple payment options. SSLCOMMERZ has been awarded the Payment Systems Operator (PSO) license by Bangladesh Bank and it is also certified as a Level 1 Service Provider on Payment Card Industry Data Security Standards (PCI DSS v3.2), which is the highest level of recognition for data security in the payment industry worldwide.

The idea behind ZPay is to replace the tedious task of providing card details every time someone makes an online purchase and also to add security and convenience in the physical merchant locations while paying through debit/credit cards. With ZPay, customers can store multiple cards under an account in the app and won’t have to carry a number of cards in the physical wallet anymore. The card data and account information are safely stored in encrypted format in the certified back-end server of ZPay and SSL COMMERZ platform. With ZPay, you will just need to scan a QR code at a merchant store be it online or offline and select a card to make the payment. The QR codes will be displayed on merchants’ websites or physical stores. The use of POS machines to accept payments make the entire payment process cumbersome and it is expensive for merchants to maintain these devices. With ZPay, merchants will just need to present a printed or electronic QR code to the customer to receive payment. No more expensive devices or network connectivity required to offer convenient payment methods to customers.

Since physically carrying and swapping cards in POS are getting inconvenient and insecure, ZPay can bring you a complete solution to avoid card forgery. In recent days it has been found that while using in POS and ATMs, card data are getting stolen and clone cards are being made by technically advanced thieves. Only recently fraudsters have withdrawn a huge sum of money from ATMs and POS using stolen card data and cloned cards. It has been found that fraudsters have copied both debit and credit cards information by attaching hidden cloning devices with the POS machines in Superstores. With the increased use of apps like ZPay, we can prevent such card forgeries. As ZPay users won’t need to give their cards physically to anyone at POS or type it online, there will be no risk of theft. ZPay uses multiple security layers and high-grade encryption to protect cardholder’s information. ZPay also uses multiple authentications such as CVV input, OTP verification, pattern or fingerprint verification from the device to prevent unauthorized access.

However, ZPay is not a conventional electronic wallet in the sense that you can store digital money in it. In an electronic wallet platform, you can deposit or save money after collecting it from different sources and then you can spend that electronic money; whereas ZPay establishes a direct link with your card accounts and don’t store any electronic money. ZPay has multiple layers of security, so people can use this service stress-free. In ZPay, there is a provision to link other electronic wallets which may be integrated with ZPay so apart from Cards, you will see other payment channels available in ZPay in future.

In this era of Information and Communication Technology (ICT), spreading e-Commerce and digital payments have become one of the major goals of the present govt. With the leadership of current technology pro Minister- Mr. Mustafa Jabbar and State Minister- Mr. Zunaid Ahmed Palak, MP at the Ministry of Posts, Telecommunications and Information Technology, Bangladesh as a nation is well on her quest to fast becoming a Digital Nation. Under the guidance of Honorable Prime Minister Sheikh Hasina and the ICT Advisor Sajeeb Wazed Joy, the ‘Vision 2021’ of the present government aims at developing Bangladesh into a resourceful and modern economy through efficient use of ICT. Along with rapid internet adoption, technology conscious young generation, the commitment from the leaders is the most positive sign to build up a successful digital economy. ■


Note from the author: This article is a subtle attempt to summarize the evolution of the concept of money and advancements in the payment technologies in the world and in Bangladesh through the perspective of the author. This is not written based on any research and should not be treated as a source material for any subsequent research. All the brand names, historical data and dates mentioned in this article are based on public information available on the Internet.

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