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Photo: Arif Mahmud Riad

Kona Software Lab Limited (KSLL), the Bangladesh arm of South Korea based Kona has designed NexusPay for the DBBL. Fintech team had a discussion with its MD Minaoar Hossain Tanzil to learn about its operation and the challenges of designing digital payment solutions. Here is an excerpt of that conversation for our readers.

FINTECH: What experience Kona Software Lab has in designing digital payment solution?

M.H Tanzil: Kona is a South Korean public limited company. Kona established a research wing in Dhaka with the name KSLL in 2012. From Kona’s Dhaka office, a new payment platform named KonaPay has been developed. KSLL has been instrumental in developing KonaPay, from initiation, development to certification. In 2016, Kona got the Digital Banking license in Korea and started its digital banking operation there in Korea with KonaPay. So, we can say that we have experiences of successfully designing and running a digital payment solution in a country like South Korea.

FINTECH: How KSIL comes to work with Dutch-Bangla Bank Bangladesh ltd (DBBL) in developing NexusPay?

M.H Tanzil: We have had a working relationship with DBBL for quite some times as we were involved in supplying smartcard for its credit and debit card. Kona was and still is renowned smartcard manufacturers for banks across the world and DBBL was among the first few banks who have adopted chip-based card from magnetic strip cards. So we had business relationship there.

So, once while discussing with the DBBL officials, we popped the idea of developing a digital payment solution for the bank and interestingly DBBL too was thinking of doing so.

Since we already had developed expertise in the area, they thought of engaging us in designing a comprehensive digital payment solution for them. This is how the idea of NexusPay was born.

FINTECH: Beside DBBL, does KSLL work with any other bank in the country now to design its digital payment solution?

M.H. Tanzil: We have also worked with Bank Asia. They have implemented our Konapay engine to run its digital payment solution.

FINTECH: What do you think is the future of mobile based payment in Bangladesh?

M.H Tanzil: If you look at the last 10-15 years, you will find that people in Bangladesh have well adopted with the payment through credit cards. Especially in the urban areas, people now use cards more often than cash and they are getting accustomed with it.

During the same period, the mobile phone, especially smartphone has a great proliferation among the people and it has sort of become an integral part of an individual’s life. People have understood the advantages of smartphone in daily usage.

Mobile based payment system in a way combines the benefit of mobile phone and bank cards. It basically carries the credit card in the phone. So it means, if you have a smartphone, you have your wallet in it as well. One would obviously understand the benefit of it. I think mobile based payment would be adopted by large number of people in no times. It is bound to happen.

FINTECH: What are the most important aspects of digital payment?

M.H Tanzil: The financial transaction market is obviously changing globally. It is also slowly changing in Bangladesh. But you have to understand that the app which does financial transaction is not like any other apps. The most important part of an app that does financial transaction is its security. For developing such app, at first, you need conduct your R&D properly. You need to measure the whole scenario from a vantage point so that you can full-proof your system. If you leave any hole, then the system will be compromised through that.

This is because when you conduct financial transaction through your mobile phone, it means, your financial data is open to the operating system (OS) of your smarphone. Now the OS used in the samartphone is called Rich OS. This OS is given for free. Earlier the payment system was made through a secured OS, now to meet up the need of delivery channel of the consumers; it has been introduced into a system that has Rich OS. Rich OS has rich user experience but of course the security is heavily compromised here. So the first and foremost challenge is to develop security here.

Another challenge is the adoptability. A bank here can process the regular delivery channels like cash, cheque or debits and credit cards. It cannot process app as of now. Now digitization of banking is basically bringing that card facility inside of an app. So some changes have to be brought in the banking system. Similarly, when we use that app to do some transactions, some changes have to be made in the transaction system as well. All these changes have to be inter-operable. It means the app will have to be compatible with all-Visa, Mastercard and others.

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