Mastercard has been working relentlessly to create new experiences for its users. How have innovations played a role in this endeavor?
Mastercard is a leading technology company in the global payment space, so innovation is the key. And when you are talking about transactions or payments, if you cannot bring innovation, it will be difficult to sustain at the market. Therefore, with innovation being at the core of our endeavours, Mastercard’s ingenuity has become well-known across the world. We continuously strive to bring cutting edge technology to ensure an amazing experience to its consumers and cardholders so they can take benefits of new technology in their daily life.
We all know that technology is not an unmixed blessing.
In the age of digital theft, where the criminals are getting smarter and bolder, is there any awareness program for your consumers?
Before getting into that, I want to talk about the common trends that we are witnessing. Compared to the developed world, the threats that we are facing are very limited. But at the same time, we need to take the patterns of the cyberattacks into account. There was a time when individual hackers were responsible for such punishable crimes. Now such attacks are more coordinated and possibly engages more than one hacker in most of the cases.
As hackers and fraudsters are becoming smarter, we have to keep ourselves ahead of them to secure our customers. Our systems are getting numerous attacks in a day and we need to ensure cutting edge technology & security measures to safeguard us and our customers. We are constantly innovating and strengthening our security to ensure that our customers are a step ahead of security threats.
Now, if you talk about the overall safety, I strongly encourage everyone to do more digital transactions as the market has evolved. In the past, we had Mag stripe Cards, now we have moved to the chip card called EMV chip card, the cutting edge technology where customers data is completely protected.
Last year, we launched EMV contactless card, which is just as safe as the EMV chip card. I believe the combination of innovation and implementation is the key to ensure robust security for the users. At the same time creating a value proposition for protecting the cardholders and customers from being attacked by cybercriminals is fundamental.
BANGLADESH IS CURRENTLY GROWING AT A REMARKABLE PACE. HOWEVER, WHEN IT COMES TO DIGITAL PAYMENTS, WE ARE STILL SCRATCHING THE SURFACE. ACCORDING TO A RECENT REPORT, THIS (DIGITAL PAYMENTS) ONLY AMOUNTS TO 6% OF THE OVERALL GDP WHICH IS A VERY NOMINAL PART OF OUR ECONOMY.
The economy has been witnessing an upward trend as per the latest reports. Has this been a boon for the usage of cards as a whole? What’s the trend have been observing lately?
Bangladesh is currently growing at a remarkable pace. However, when it comes to digital payments, we are still scratching the surface. According to a recent report, this (digital payments) only amounts to 6% of the overall GDP which is a very nominal part of our economy. I always believe sky’s the limit. Currently, the growth rate of this sector is minute compared to the GDP growth rate; nevertheless, there is room to grow and favorable regulations will allow the number of digital transactions to grow exponentially.
We are not only talking about digital transactions, it also includes digitizing government subsidies, payments and revenue collection. Enabling digital payments is a key pillar of the government’s vision of completely digitalising Bangladesh by 2021. A collective approach of digitalisation and innovation will make our lives easier and take us closer to completely digitising Bangladesh and to become a “Less Cash Society”.
Can you please share about the challenges you faced as a country manager? How have you overcome those?
I feel like the awareness level regarding digital payments among Bangladeshis is very low. We are continually working on educating people about the technicalities of the process as there is a lot of fear and confusion which stems from a lack of knowledge. We are continually working with stakeholders of the sector, including the regulatory body to make users more acquainted with the process of digital payment.
Regulation is a significant challenge in Bangladesh; it is mandatory to have a TIN certificate to be eligible to obtain a credit card. The number of valid TIN holders is meagre to make credit card business viable in Bangladesh. Conversely, promoting the use of credit cards will ensure more transparency as the transactions are traceable. There are other barriers; for example, banks are not allowed to issue a contactless debit card, there is a travellers quota that restricts cross-border transactions to $12,000 a year.
There are also immense opportunities which are not being utilised. The new national ID (Smart Card) card has an embedded chip if the government allows payment options, more than ninety-five million people of our country will come under the digital payment system. These are long term plans that can usher a new era of the digital economy. It is also imperative to ensure a level playing field for all the players in the market. Central bank directed all the banks to route all transactions through the national payment switch. After we spoke to the Central Bank, they allowed an extension on that notice twice. It an excellent sign as the regulators have become much more receptive, they are trying to understand the market more, to make regulations more effective and efficient.
The unpredictable national budget is also challenging for the sector; the latest budget has slapped on two new tax criteria on this sector. The first one is VAT on e-commerce which was initially at 7.5%, but after discussions between the e-commerce platforms and the NBR, it came down to 5% on value addition. Secondly, a substantial tariff hike on bank plastic card imports. Mastercard worked with partners to convince the authorities to roll back the hike and bring down to the previous rate. These are the challenges we are currently facing, but Mastercard is working closely with all the stakeholders to resolve the issues.
Mastercard has been in operation for 28 years in Bangladesh. What are your thoughts on this achievement?
It has been an enormous honour — innovation is within our DNA, and we are continually updating our products. At the same time, we believe in financial inclusion. Four and a half years back, our global CEO, Ajay Banga committed to the World to bring almost half a billion people under the banking umbrella. We are close to achieving that. Financial inclusion is an area that we are highly focused on. We are operating from a dedicated office for the last six years, which is run by local employees; I believe it is a remarkable achievement. Initially, the journey was very challenging, but over the last few years, we have pulled ourselves together, and Mastercard is performing very well in the sector. All the stakeholders in the sector consider us their partners rather than a different business entity and trust us with their money and information. So, I believe it has been a successful journey.
What type of new innovations can we expect to see from Mastercard?
We are currently working with twenty banks in Bangladesh. Recently, we have introduced the EMV Contactless credit cards for our clients. Mastercard has also put two online payment gateways in Bangladesh, collaborations with Eastern Bank and South East Bank. The virtual card networks have also been very popular since commencement, and we have plans to introduce Bangla QR commissioned by Bangladesh Bank. We believe QR can change the landscape of payment system in this country: being cost-effective this method will be useful in bringing the masses of this country under the digital payment system.
Do you have any closing statements for this interview?
I would encourage people of Bangladesh to adopt more means of digital transaction and contribute to the national GDP. Cash transactions are becoming outdated all across the developed world; it is time for us to adapt to the future of transactions.
Earlier this year we have also launched add money service with the largest MFS in the country, bKash where we have implemented real interoperability between the card and MFS platform. We are seeing increased interactions among the users, transferring money between card and bKash. Any bank-issued Mastercard card holder can transfer money from Mastercard Debit, Credit and Prepaid card to bKash wallets in real-time–this kind of interoperability between the two sectors will benefit the users immensely.
Recently, we have organized Mastercard payment summit 2019, the theme of the event was “Future. Ready. Now” where we invited all the stakeholders including banks, merchants and regulators. Our subject matter experts came from across Asia to present on safety, security, acceptance, digital solutions, Mastercard Innovation Lab and Mastercard as a brand. Concurrently, we have recognized our customers for their performance. The chief guest was Md. Ashadul Islam, Senior Secretary of the Financial Institute Division under Ministry of Finance. Ahmed Jamal, Deputy Governor of Bangladesh Bank joined the event as the special guest along with JoAnne Wagner, Charge de Affairs USA embassy as the guest of honour.
As an organization, we have a Centre for Inclusive Growth which is continually driving financial inclusion and numerous other programs as a means to give back to society. For the last six years, we are providing financial literacy to women entrepreneurs across the country through one of our NGO partners. So far, we have covered almost 300,000 women entrepreneurs with financial literacy. We are also running another programme for the RMG workers, which is an awareness program to digitalising their wages.
Photograph – Din Muhammad Shibly