Commercial payments will be the key driving force for growth in digital payments in the coming days, Soumya Basu, country manager of Visa Inc – an American multinational financial services corporation – for Bangladesh, Nepal, and Bhutan, told The Business Standard in an exclusive interview recently.
"We foresee the growth of a digital-first economy when consumers and businesses are both digitised. Hence, B2B or commercial payments is the next avenue for growth," he said in view of the growing digital payments market in Bangladesh that got an impetus from the government's "Digital Bangladesh" vision.
Soumya said while they have witnessed some movement toward digital payments for businesses, cheques and cash payments continue to be used, especially with small businesses and in the last mile within the supply chain.
"There is an immense scope for small and large businesses to make commercial payments using digital modes, which will bring about a lot of positive changes in the business landscape."
Cards are one of the most familiar forms of digital payments. In Bangladesh, the growth of the digital payment market has been further strengthened by the adoption of digital wallets and online shopping. Visa has around 10 million cards in circulation in the country and around 50 banks and non-bank financial institutions are working with this American brand.
Cards are now being used for shopping online, paying utility bills, loading digital wallets, or making cross-border payments.
In addition to vast segments of retail consumers, Visa can serve the large ecosystem of businesses, said Soumya.
A large number of micro, small, and medium enterprises (MSMEs) in Bangladesh which control 70% of the country's economic activities and account for 80% to 85% of the total industrial employment, still rely on cash and cheques to make and receive payments.
Speaking about the prospect of this sector, Soumya Basu said, "Visa's commercial card solutions can drive digital transformation for MSMEs and make them more efficient and less dependent on cash, leaving them with more time to focus on business growth."
Visa's Business Payment Solution Provider allows buyers to pay non-card accepting suppliers, he added.
He also said commercial cards can go beyond serving as T&E (travel and entertainment) and for businesses to make and receive payments across the value chain.
"For example, a retail garment brand would be procuring supplies of fabric, machines, sewing accessories, etc from multiple partners, and selling its goods to distributors, retailers, malls, etc.
"What if it could pay suppliers using cards, instead of the cumbersome cash/cheque methods, and receive payments from its buyers digitally as well?"
"Commercial card solutions make it faster to make and receive payments, and help businesses utilize credit more efficiently," he said.
Financial fraud is a major shortcoming of the digital payment system.
Speaking about Visa's safety measures to its valued customers, Soumya said "Bringing industry best and superior payment technology services to the country, we've played an active part in the proliferation of technologies such as contactless payments, secure payments for e-commerce, QR payments through BanglaQR, etc."
"Tokenisation is another way of securing payment data through the value chain. Through Visa Token Service, tokenisation replaces sensitive account information, such as the 16-digit account number, with a unique digital identifier called token. The token allows payments to be processed without exposing actual account details that could potentially be compromised in case of a breach," he added.
Apart from Visa, Mastercard and other global payment systems, there are some domestic payment systems, some of which are also known as mobile financial services (MFS).
Soumya Basu said he believes that all digital payment service providers, whether it is Visa or fintechs or banks, are working towards common goals – to bring more customers into the digital payments ambit and to make the payment experience safer, more convenient and seamless for consumers and businesses.
"As a business, we believe in working with partners across the value chain to give more value to end customers."
"We believe there is a scope for synergy and subsequently growing the digital payments pie so that everyone, whether the consumer, a business or the ecosystem – benefits from it," he added.
Regarding consumer patterns, the Visa country manager said youth and the growing middle-class group with high disposable income is the largest user of digital payment.
"Consumers in Bangladesh, like in many other countries, now demand an anytime, anywhere shopping and payment experience – where varied payment instruments enable them to pay at their convenience, opening ample opportunities for players in payments.
"We expect that this change in consumer behaviour is here to stay," he said.