Chowdhury Mohidul Haque

Payment and transaction methods are constantly evolving from the physical exchange of bank notes and coins to credit and debit cards and mobile devices. How we make payments and carry out transactions are also changing. Whilst many people still perform transactions in person, carrying out transactions over the phone or via the web is becoming increasingly popular. Today, with the growing need of people for convenience, the different technological innovations are the greatest providers of convenience to the people.

Electronic Prepaid Card also embraces the mobile phone as a convenient, cash-free payment and transaction medium, delivering a range of financial and payment applications, designed to make everyday tasks easier to perform for banked subscribers. Furthermore, it extends formal financial services to the unbanked community who constitute about 85% of the population of Bangladesh.

In spite of all these developments a large number of the population of the country are still outside the banking network. Reaching the banking facilities through Electronic Prepaid Card and mobile devices to our teeming millions is of utmost importance for our economic emancipation. This will give a great leap forward towards the vision of Digital Bangladesh.

Electronic Fund Transfer means any transfer of funds which is initiated by a person by way of instruction, authorisation or order to a bank to debit or credit an account maintained with that bank through electronic means and includes point of sale transfers, automated teller machine (ATM) transactions, direct deposits or withdrawal of funds, transfer initiated by telephone, internet and card payment.

An Electronic Prepaid Card is an Electronic Fund Transfer medium with Mobile Banking Facility that utilizes ATMs along with Mobile Phones to make transaction. Also it can be used to deposit or draw cash directly from the ATMs, Pay points and other delivery Channels.

Electronic Prepaid Card enables subscribers to quickly, easily, and securely transfer balances to other subscribers via their mobile phones. Transfers are carried out electronically, requiring no intermediary. Any mobile subscriber can use the mobile money service, and following a transaction, both parties receive automatic short message service (SMS) notification as confirmation.

Electronic Prepaid Card may be a mobile commerce service delivery platform, for banking and credit card gateways. As a multi-bearer platform, it allows subscribers to use SMS as the money transfer instruction, to access the service and provides operators with comfortable mode of transaction.

Also Electronic Prepaid Card fraud and security management modules must deliver the level of security required by service providers - ensuring funds are protected so that subscribers can perform transactions with complete peace of mind

All transactions are made directly through Electronic Prepaid Account. A Customer has to open New Prepaid account to have the service of Electronic Prepaid Card. The electronic fund transfer would take place using two means that are Electronic Prepaid Cards and Mobile Phones:

The central bank of Bangladesh as a regulator granted license to a private company partnering with some banks for operating Digital Money Electronic Prepaid Card combining mobile device which is still awaited to come into operation. This system will operate complying with the following procedures:

* To access the service using Prepaid Card, Customers would be given a Card with a secret PIN.

* Card would be used in to deposit or to draw cash directly from the ATM and Authorised Pay Points.

* To access services hosted on the Digital Money platform, the user registers for mobile commerce services. The registration process can also be done using the Mobile Phone.

* Once registered as an authorised user and issued with a PIN, the user is ready to transact with mobile phone, sending requests over the phone by SMS and receiving notifications when transactions are complete.

Regarding the socio-economic condition, the need for faster technological development is increasingly felt in Bangladesh. Development plans of Bangladesh have emphasised science and technological research to develop technologies through the development of indigenous technologies. So Bangladesh is on the move to develop its internal base of technology to make it a Digital Bangladesh.

Technological development has put significant mark in various sectors of the country; different technological means are also being applied in the banking sector to facilitate various transaction processes making daily life easier for the people. Automation of the clearing house, online banking and finally the inception of mobile banking are the major examples of such technological development in the financial sector.

As the country is heavily dependent on imported technologies, proper planning is required for such implementation. Having that in mind, the government of Bangladesh has taken several steps toward the technological development of the country; National Science and Technology Policy has been formulated and adopted by it.

With constantly expanding telecom customer base, it is expected that providing banking through Mobile Phones would bring a significant level of change in the day-to-day transaction process of the general people, facilitating the cash flow to contribute toward the development of the county.

As a developing country, the overall socio-economic condition of Bangladesh is changing rapidly, so does the lifestyle of the people with the development of economy and technology. In modern days, technology is becoming a significant part of our daily life. As it is making our daily life so much easier, people of the country are adapting different technological means and getting used to it. In this technology-oriented lifestyle, it also has put its marks in the financial sector, ranging from the operations of the financial institutions to the modes of payments and transactions.

Also with the development of technology and with modern lifestyle, the mobile base is reaching millions of people in the country. The use of mobile phone is now-a-days seen widely even in the villages and people from almost every profession are using it. Among them many subscribers of mobile phone are unbanked, with no access to formal financial services. Mobile banking is purported to addressing the needs of this sector. Together with banking institutions and mobile operators, it enables access to banking services (bank account, transfers, remittances) via the mobile. Its outcome will facilitate financial independence for the unbanked and greater overall economic growth.

With the advent of modern amenities of electronic exchange process and medium, the introduction of this product can meet the needs of the time to provide the benefits to the mass people in the country. Under the existing socio-economic condition of the country and in consideration of the technological development and the growing trend of people in favour of their inclination toward it, the Electronic Prepaid Card combining mobile device is completely adaptable in Bangladesh.

Mobile banking may benefit the people at large in many ways:

* It will enable quick and easy transfers of money and with greater security.

* With the ability to support transfers of money or services, Digital Money Electronic Prepaid Card will provide great flexibility to the subscribers for making transactions.

* With access to financial services at any time and anywhere, mobile banking can deliver greater convenience to the banked subscribers.

* Its application can make it a highly flexible mobile money service delivery platform for mobile operators and the financial community.

* Subscribers registered for the service can settle their bills directly from their mobile phones, with the payable amount being deducted from their digital money account.

* Mobile payments can simplify bill collection and processing, speeding up payment cycles and improving operational efficiencies.

* By simplifying management and administrative aspects of bill collection and processing, mobile payments can also improve overall operational efficiencies -- and by delivering extensive business reports on transactions performed, operators can quickly identify and analyze trends to improve the service offering.

* The solution is simple, economic, secured, and customer-oriented. It can fulfill subscribers' everyday needs for banking services, paying utility bills, ticketing and other services.

* Unbanked people can avail this banking service through Digital Money Electronic Prepaid Card.

Mobile banking may benefit the economy in many ways:

* It can help increase the cash flow in the economy, as the introduction of the system will facilitate and make it all kinds of payments easier without carrying cash.

* It will provide the banking services to the unbanked. Not everyone in this country is now involved in receiving banking services. With the development of modern technologies, a great percentage of the people of the country are now using mobile phones. Digital Money Electronic Prepaid Card will enable them to use banking services, money transfer and payment facilities using their mobile phones.

* Mobile banking supports all players in the ecosystem, providing standard, open interfaces to the underlying mobile banking platform and supporting a range of business models.

Achievement of economic growth is the single-most important goal of every nation. Economic growth refers to the ability of a nation to produce more goods and services and thereby help raise the living standard of its people. For accelerating the pace of economic growth, it is most important to have smooth and increasing cash flow in an economy.

Apart from the use of physical money and debit and credit cards, a greater use of mobile phone as a mode of transactions will make payments easier and increase cash flow in the economy. The introduction and expansion of electronic prepaid card combining mobile device will thus open up many promising prospects for economic development of the country.

The writer is former Executive Director & Project Director, RRP Project (UKAID), Bangladesh Bank.

edcmhbb@hotmail.com