In a groundbreaking move toward financial modernization, Prime Minister Sheikh Hasina officially launched the first-ever national card scheme in Bangladesh, aptly named ‘TakaPay.’ The inauguration took place on a historic Wednesday morning, the 1st of November, 2023, during a video conference held at Ganabhaban. This visionary initiative, spearheaded by the Bangladesh Bank, introduces a local alternative to global giants such as Visa Card, MasterCard, and Amex. Unlike its international counterparts, TakaPay’s services will be completely domestic, aiming to reduce foreign currency dependency and bolster economic self-sufficiency within the country.
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What Is TakaPay?
TakaPay, introduced by Bangladesh Bank on November 1, 2023, is a National Card Scheme that serves as a viable local alternative to well-established international card services such as Visa, MasterCard, and Amex.
TakaPay Card transactions will be settled only through the National Payment Switch of Bangladesh (NPSB) under the purview of Bangladesh Bank, ensuring a reliable and efficient payment ecosystem within the country. This local payment solution enhances financial independence and reduces reliance on foreign card services and reserves contributing to economic stability.
In an awe-inspiring declaration at the opening ceremony, Prime Minister Sheikh Hasina invoked the spirit of a vision outlined in the 2008 election manifesto. The promise of a digital Bangladesh now paves the way for an even more ambitious goal: a smart Bangladesh by 2041. The introduction of the TakaPay card, under the vigilant eye of the Bangladesh Bank, will undoubtedly ease financial transactions, making them more accessible and efficient.
But the vision extends beyond the boundaries of the nation. Prime Minister Sheikh Hasina also emphasized the importance of making these services accessible to expatriates and marginalized groups. The PM explains and presents all aspects of this initiative from the Smart Bangladesh viewpoint. She also focuses greatly on ensuring security measures. This commitment to inclusivity underscores the government’s vision of creating a cashless society.
- Prominent Attendees: The event was graced by the presence of central bank governor Abdur Rauf Talukder, among other notable individuals. Their presence underlines the significance of the TakaPay launch and its potential impact on the country’s financial landscape.
- Moderation and Welcome Address: Prime Minister’s Principal Secretary, Mohammad Tofazzel Hossain Miah, moderated the function, ensuring the smooth flow of the event. Additionally, BB Governor Abdur Rouf Talukder delivered a welcome address, setting the tone for the event and emphasizing the importance of TakaPay.
- Presentation on TakaPay: BB Executive Director Mezbaul Haque presented various aspects of the national card scheme “TakaPay.” This presentation likely delved into the technical details, benefits, and strategic importance of TakaPay, giving attendees a comprehensive overview.
- Demonstrations by Bank Managing Directors: Key figures from prominent banks, including Sonali Bank Managing Director Afzal Karim, Brac Bank Managing Director Selim RF Hossain, and City Bank Managing Director Mashrur Arefin, demonstrated the use of TakaPay cards, online payment methods, and ATM withdrawals at their respective offices. These demonstrations provided practical insights into how TakaPay is integrated into daily banking operations.
- TakaPay in Action: Three customers demonstrated the practical use of TakaPay live. Shapla Khatun from Sonali Bank PLC deposited to Universal Pension Scheme installment using her TakaPay card, Nusrat Jahan from Brac Bank PLC purchased a Dhaka-Chattogram bus ticket online using her TakaPay card, Freedom Fighter Mahbubul Islam withdrew money from City Bank’s ATM using TakaPay Cards issued by Sonali Bank PlC. This live demonstration showcased how seamless and convenient the system is for users.
Some Aspects of TakaPay
A Unified Approach to Banking
Under the Bangladesh Bank’s stewardship, 13 commercial banks initially committed to adopting the TakaPay Card system. Of these, three, including the state-owned Sonali Bank and private-sector banks City Bank and BRAC Bank, have taken the lead in launching TakaPay Card services. These pioneers will initially offer ‘TakaPay’ on a pilot basis. Another 5 are almost ready to launch the service.
The scope of the TakaPay Card is expansive. It’s designed for use at ATMs, point-of-sale terminals, and online platforms throughout the nation. In its initial phase, it functions as a debit card, but the roadmap includes plans for introducing credit cards in the future.
A Global Vision
Although the initial rollout is domestic, the future holds even more ambitious prospects. TakaPay aspires to expand its reach internationally. Once foreign banks and institutions join the platform, TakaPay Card holders will be able to utilize this payment system abroad. In line with this international vision, plans are underway to extend the card’s usability to India and, in due course, to other countries with a significant Bangladeshi population.
A Solution for Travelers
One significant advantage of the TakaPay Card is its utility for travelers, especially to neighboring India. Many Bangladeshis journey to India each year for various reasons, including medical treatment and tourism. Typically, they need to acquire US dollars, convert them to Indian rupees, and often incur exchange rate losses. The introduction of the TakaPay Card offers an efficient solution to these challenges. Travelers can withdraw money or make payments directly using their TakaPay Card, bypassing the additional costs associated with currency exchange.
The Promise of Reduced Costs
The TakaPay Card presents the opportunity to mitigate foreign exchange costs, which have been escalating due to the growing issuance of cards from international payment systems such as Visa, Mastercard, Amex, JCB, Discover, etc. Through the introduction of a national card, the financial sector can potentially enjoy substantial savings. Syed Mahbubur Rahman, the Managing Director of Mutual Trust Bank, compared the TakaPay Card to India’s RuPay, highlighting that it could significantly reduce transaction fees and offer a heightened level of security under the central bank’s regulation.
Innovating Payment Networks
Traditional payment networks like Visa and MasterCard have long been instrumental in facilitating electronic money transfers between businesses, including banks and other financial institutions. These networks provide branded payment processing services for credit, debit, and prepaid cards offered by banks and financial institutions to their customers.
A Secure and Progressive Future
As the TakaPay Card unfolds, it becomes increasingly evident that the transformation of Bangladesh’s financial landscape is well underway. The card’s gradual introduction in tandem with the adoption of EMV technology reinforces its commitment to security, making it an attractive choice for consumers in a rapidly evolving digital economy.
The introduction of the TakaPay card in Bangladesh represents a monumental step in the country’s financial landscape, and the journey towards its implementation is nothing short of remarkable. Under the visionary leadership of Bangladesh Bank Governor Abdur Rauf Talukder, the TakaPay card emerged as a groundbreaking solution to address the financial needs of the people of Bangladesh. This innovation is set to revolutionize not only the domestic payment system but also how individuals travel and conduct financial transactions in neighboring countries.
Addressing the Challenges of Travel and Currency Conversion
Governor Abdur Rauf Talukder highlighted the challenges faced by many Bangladeshis who travel to India for various purposes, including medical treatment and tourism. Traditionally, these travelers had to acquire US dollars and then convert them into Indian rupees, often incurring significant exchange rate losses in the process. To tackle this issue and provide a practical solution for travelers, the central bank introduced the TakaPay debit card. This card enables Bangladeshis traveling to India to withdraw money in Indian rupees, avoiding unnecessary extra costs associated with currency exchange.
The Journey to TakaPay: Planning and Preparation
In the post-budget press conference on June 2, Governor Abdur Rauf Talukder announced the initiative to launch the National Debit Card on behalf of Bangladesh Bank. He again said at the announcement ceremony of the new monetary policy at the meeting room of Bangladesh Bank on June 18, 2023 about the national card scheme. To bring the TakaPay card to life, Bangladesh Bank established two vital committees. The steering committee, led by Deputy Governor Kazi Sayedur Rahman, and the working committee, headed by the Director of the Payment System Department, Motasem Billah, played instrumental roles in shaping the card’s development and rollout. These committees brought together representatives from eight prominent local banks, including BRAC Bank, United Commercial Bank, City Bank, Sonali Bank, Eastern Bank, Islami Bank, Dutch-Bangla Bank, and Mutual Trust Bank.
To ensure a successful launch, a three-day workshop was conducted at Bangladesh Bank’s head office, which brought together representatives from the consultancy firm Fime and the eight participating banks. Fime, based in Paris, was entrusted with the responsibility of preparing the TakaPay card, underlining the international collaboration that went into this groundbreaking financial innovation.
Fime is a global quality assurance and testing services provider for the digital payments and smart mobility industries. Fime helps clients to develop, build and launch trusted digital payment experiences across fintech, banking and smart mobility. Fime also helps clients to ensure the quality, performance, functionality, security and interoperability of their innovations to launch successfully.
Fime’s services include:
- Consulting and advisory services: Fime’s experts help clients to understand and capitalize on the changes that are shaking up their market, and to develop and implement strategies to address the most complex issues.
- Testing and certification services: Fime offers a wide range of testing and certification services for payment solutions, smart mobility solutions, and other digital technologies.
- Security assessment services: Fime’s security experts help clients to identify and mitigate security risks in their products and services.
- Interoperability testing services: Fime helps clients to ensure that their products and services are interoperable with other systems and solutions in the market.
Here are some of the benefits of working with Fime:
- Expertise: Fime has a team of experts with deep knowledge of the digital payments and smart mobility industries. Fime’s experts can help clients to navigate the complex regulatory landscape and to develop and implement best practices.
- Global reach: Fime has a global network of offices and laboratories, which allows Fime to provide its services to clients all over the world.
- Technology: Fime invests heavily in technology to ensure that it has the latest tools and capabilities to test and certify the latest digital technologies.
- Reputation: Fime is a trusted partner to many of the world’s leading banks, payment processors, and smart mobility providers. Fime’s reputation for quality and service is unmatched.
TakaPay: An Independent and Secure Card
The steering committee emphasized the unique nature of the TakaPay card. Initially introduced for internal use, it offers users a level of security and control that surpasses international payment platforms. This internal regulation, under the jurisdiction of the central bank, ensures the card’s security and compliance, contributing to a safer and more reliable financial ecosystem.
Additionally, the TakaPay card addresses the increasing foreign exchange expenses incurred by banks and other financial institutions in Bangladesh due to the proliferation of international payment systems, including Visa, Mastercard, Amex, JCB, Discover, etc. The national card seeks to reduce these costs significantly, helping to retain more foreign currency within the country.
A Regional Shift: Joining the Ranks of National Cards
Bangladesh joins neighboring countries, such as India (Rupay), Pakistan (PakPay), Sri Lanka (LankaPay), and Saudi Arabia (Mada Card), in introducing its own national card. This trend reflects the growing importance of creating an independent and sovereign payment solution, especially in the current geopolitical context. By reducing reliance on international payment platforms and their associated fees and charges, Bangladesh seeks to save valuable foreign exchange.
The TakaPay card is not static; it’s evolving with the times. While initially serving as a debit card, the roadmap includes plans to introduce a TakaPay credit card. Furthermore, in an age where security is paramount, the card is expected to transition from magnetic strip technology to the advanced EMV technology, ensuring added layers of protection.
The Promise of TakaPay: A Financial Revolution
The introduction of the TakaPay card is more than a financial milestone; it’s a testament to Bangladesh’s commitment to economic progress, financial inclusivity, and global integration. As it gains momentum and extends its services to encompass a wide range of financial activities, the TakaPay card is poised to empower individuals and businesses across the country. By simplifying travel and financial transactions, while reducing costs and foreign exchange expenditure, this national card is set to create a brighter financial future for Bangladesh and its people.
Benefits of TakaPay
TakaPay ushers in a new era of banking and financial services in Bangladesh, offering a myriad of benefits to banks and customers alike. The key advantages of TakaPay include:
1. Efficient and Cost-Effective Transactions: TakaPay empowers banks to debit their customers at minimal costs, leveraging the National Card Specification. Banks can issue both credit and prepaid cards, further expanding their services to a wider customer base.
2. Localized Control: Transactions executed through the ‘TakaPay’ card will be settled within Bangladesh’s own network. This grants Bangladesh Bank full control over all transactions, ensuring that no transaction-related information is shared beyond the nation’s borders.
3. Fee-Free Transactions: The usage of ‘TakaPay’ cards within Bangladesh ensures that no fees or charges are incurred for any transaction. This not only eases financial burdens but also leads to significant savings in foreign exchange.
4. Enhanced Accountability and Transparency: All transaction information will be meticulously recorded and maintained by Bangladesh Bank, enhancing accountability and ensuring complete transparency in financial operations.
5. Inclusive Access: ‘TakaPay’ cards will also be made accessible to the working class and low-income customers, aligning with the goal of broader financial inclusion. The broadcasting facility from Ganabhaban further facilitates this endeavor.
Requirement of National Card Scheme
To fully grasp the significance of the TakaPay system, it’s crucial to understand the key requirements that led to its inception:
1. Development of an Independent Sovereign Payment System: The establishment of an independent payment system is imperative to bolster financial sovereignty and reduce reliance on external entities.
2. Ensuring Uninterrupted Domestic Payment Operations: An autonomous payment system safeguards the internal financial infrastructure of the country, ensuring its continued operation even in the face of hostile or adverse circumstances.
3. Savings in Foreign Currency: By conducting payment operations through its own network, Bangladesh can significantly cut down on foreign currency expenditure.
4. Reducing Transaction Costs: The employment of a localized network minimizes transaction costs, further contributing to financial efficiency.
TakaPay Approved Transactions
The versatile ‘TakaPay’ card is designed to accommodate a wide array of transactions, offering incredible flexibility and convenience to users. Approved transactions include:
1. Cash Withdrawal from ATMs: ‘TakaPay’ cardholders can conveniently withdraw cash from ATMs across the country.
2. Point-of-Sale (POS) Transactions: Users can make payments for goods and services through POS machines at shops or merchant outlets, as well as by scanning Bangla QR codes.
3. E-commerce and Online Payments: The card enables hassle-free payments for goods and services in the burgeoning e-commerce and online marketplaces.
4. Fund Transfers: ‘TakaPay’ supports various fund transfer options, including card-to-card transfers, card-to-mobile financial services (MFS) wallet transfers, and card-to-bank account transfers.
5. Utility Bill Payments: Users can conveniently settle utility bills, tuition fees, and toll payments.
Future Action Plans
As TakaPay continues to evolve and expand its services, the future holds exciting prospects. The vision for ‘TakaPay’ extends beyond domestic borders, aiming to bridge international payment systems and infrastructure. The future action plans for ‘TakaPay’ include:
1. Mutual Payment Infrastructure: Collaborating with different countries to develop mutual payment infrastructure, facilitating inter-country transactions and cross-border financial activities, and fostering international financial integration.
2. Co-Badging with International Card Schemes: Co-badging TakaPay cards with established international card schemes will enable card-based cross-border transactions, making it a viable option for global travelers.
3. Mass Transit and Infrastructure Usage: TakaPay’s vision goes beyond traditional financial transactions. Plans are underway to extend its use to cover mass transit fares for buses, trains, metros, and payments for infrastructure services like bridges and flyovers. This vision aligns with the broader goal of creating a comprehensive and seamless financial ecosystem that benefits all users.
4. Expatriate community: The success of the TakaPay Card isn’t limited to domestic use. The government of Bangladesh has ambitious plans to extend its use to countries like India and Saudi Arabia, where a substantial population of Bangladeshis resides. By facilitating transactions and financial operations in these countries, the TakaPay Card has the potential to offer significant benefits to the expatriate community.
The emergence of ‘TakaPay’ heralds a transformative era in Bangladesh’s financial landscape. By offering efficient, cost-effective, and locally controlled payment solutions, TakaPay paves the way for a brighter and more inclusive financial future for the nation. Through streamlined processes, enhanced transparency, and proactive expansion plans, ‘TakaPay’ stands as a testament to the economic aspirations and sovereign ambitions of Bangladesh.
How TakaPay works?
The operation of the TakaPay Card introduces a novel approach to payment and transactions in Bangladesh. Below, we’ll explore how the TakaPay Card works and the unique features it offers:
1. Distinct Payment System: TakaPay Card represents a distinct payment system launched by Bangladesh Bank, offering an alternative to international card services such as Visa, Mastercard, and Amex. Unlike these international giants, TakaPay transactions are routed exclusively through the National Payment Switch of Bangladesh (NPSB) under the authority of Bangladesh Bank.
National Payment Switch Bangladesh (NPSB) has been operational since 2012, facilitating interoperability among participating banks for various transactions. It currently supports interbank ATM, POS, and IBFT transactions, with consideration for Mobile Financial Services interoperability. NPSB connects 53 banks for ATM transactions, offering services like cash withdrawal, balance enquiry, fund transfer, and mini statements. For IBFT transactions, individual limits are set at 300,000 taka per transaction, up to 10 times a day, with a daily cap of 1,000,000 taka. Corporate transactions are capped at 500,000 taka per transaction, up to 20 times a day, with a daily limit of 2,500,000 taka. Participating banks must ensure Two Factor Authentication (2FA) for online, e-commerce, interbanking, and card-not-present transactions.
2. Reduced Reliance on Foreign Services: TakaPay’s key objective is to reduce the dependence on foreign card services. International providers like Visa and Mastercard have their own global platforms for processing transactions. In contrast, TakaPay conducts its transactions domestically, reducing the need for foreign currency.
3. Domestic Mediation: By relying on the National Payment Switch of Bangladesh (NPSB), TakaPay ensures that the entire payment process takes place within the country’s borders. This shift towards domestic mediation brings numerous advantages, including greater control and lower costs.
4. Usage and Accessibility: TakaPay is designed to be user-friendly and accessible to all. Users can employ the card for various purposes, including cash withdrawals from ATMs, payments at point-of-sale (POS) terminals, and online transactions. Initially, it serves as a debit card, but plans are in place for the introduction of credit card functionality in the future.
5. Security Measures: TakaPay Cards are equipped with security features. Initially, magnetic strip technology is used for securing the cards. However, as part of ongoing improvements, TakaPay Cards will transition to EMV technology. EMV technology enhances security by employing a microprocessor chip that creates a unique code for each transaction, making it more difficult for fraudsters to clone or compromise the card.
6. Pilot Launch: Initially, the introduction of TakaPay Cards by banks is carried out on a pilot basis. This approach allows for testing and refining the system before a full-scale rollout. During this phase, banks will have the opportunity to assess and improve card functionality and services.
7. Cost Reduction: One of the significant benefits of TakaPay is cost reduction. By conducting all transactions through a domestic payment network, the system significantly decreases costs associated with foreign exchange. This is not only beneficial for the banks but also for the users as it reduces transaction fees and currency conversion costs.
8. International Expansion: While TakaPay initially operates within Bangladesh, there are future plans to expand its use to other countries, including India. This expansion aims to serve the large number of Bangladeshis who travel to neighboring countries, providing them with a more cost-effective and convenient payment solution.
A Coexisting Future
It’s important to note that the TakaPay Card doesn’t signal the demise of global heavyweights like Visa, Amex, JCB, and MasterCard in Bangladesh. These international cards will continue to be vital for transactions conducted outside Bangladesh. However, the Bangladesh Bank’s vision extends beyond the borders of the nation, aiming to introduce the Taka Pay Card in countries like India and Saudi Arabia, where a large number of Bangladeshis reside.
National Cards Across the Region
This initiative falls in line with the adoption of national cards by countries in the region, including India (RuPay), Pakistan (PakPay), Sri Lanka (LankaPay), Turkiye (Troy), Russia (Mir) and Saudi Arabia (Mada Card). Neighboring countries have already recognized the merits of launching their own cards, thereby reducing the economic outflow to international payment platforms.
Where to Obtain Your TakaPay Card?
The initial launch of the TakaPay Card involves three banks in Bangladesh: Brac Bank, Sonali Bank, and City Bank. However, plans are in place to extend this privilege to other banks through official permissions. United Commercial Bank, Eastern Bank, Islami Bank, Dutch-Bangla Bank, and Mutual Trust Bank are very close to introducing the TakaPay cards.
In conclusion, the TakaPay Card initiative represents a pivotal step towards realizing a smart Bangladesh and a cashless society. With its commitment to lower costs, enhanced security, and seamless integration into the existing financial ecosystem, this new card is poised to lead the nation into a brighter and more prosperous digital future. As TakaPay takes its first steps on the path to international recognition, the prospects for a financially robust and digitally empowered Bangladesh have never looked brighter.