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MasterCard: Banking on mobile tech

Ari Sarker

Ari Sarker

Mastercard, an American multinational financial services corporation, looks to strengthen its footprint in Bangladesh through a modern electronic payment system, a senior official said.

“It is a terrific market for the electronic payment industry. The game is just getting started and we are very much excited,??? Ari Sarker, MasterCard’s division president for South Asia, told The Daily Star in an interview.
The company, which is set to open its first country office in Bangladesh in November, wants to offer innovative payment services, spearheaded by the mobile phone.
“The use of mobile wallet is now very limited in Bangladesh, but it has tremendous potential to grow seeing that the use of smartphone is growing very rapidly in the country.???
Bangladesh has around 1.2 million credit cards and 1.7 million debit cards, while mobile subscription is more than 100 million.
“The convergence of mobile and card devices, therefore, is inevitable,??? he said, adding that the full-fledged arrival of 3G services would accelerate the process.
Nearly $100 billion is spent every year on private consumption in the country, of which only 0.5 percent, or $500 million, is done through electronic payment means such as debit or credit cards and mobile wallet, he said.
Sarker, who has been with MasterCard since December 2010, tipped the country’s electronic payment industry to hit $10 billion over the next five years. “We honestly believe it is doable if the government, bank and mobile phone operators provide the necessary support.???
The headroom for growth in other South Asian countries, too, is “extremely large???, he said.
The annual electronic payment market in India is around $12 billion at present, after growing over 30 percent over the last couple of years. India now has 340 million in debit cards and 19 million in credit cards, while around 150 million people have access to internet and nearly 12 million people go online for any kind of shopping.
“We believe it would also happen here as the county has higher mobile phone penetration, and internet usage, too, is on the rise due to easy availability of bandwidth.???
MasterCard, which started card services in 1997 in Bangladesh, also wants to serve the country’s ‘bottom of the pyramid’ segment by partnering with financial inclusion agencies.
In emerging markets, the challenges for growth of the electronic payment industry involve educating the consumers and merchants and bringing the best practices for the issuing banks, he said.
“Merchants should see the value of electric payment and consumers should see the convenience in using the facility than carrying cash,??? he said, adding that card payment will induce customers to make on-the-spot purchasing decisions.
About the recent spate of card forgery in the local banking industry, the MasterCard official blamed the poor fraud-fighting tools. “Organisations have to investment money periodically to prevent fraud.???
He recommended rolling out ‘chip and pin’ cards to replace the magnetic strip cards to check forgery.
A joint effort of Europay, MasterCard and Visa to ensure greater security, the cards come with an embedded microchip that is authenticated automatically using a personal identification number (PIN). “The technology ensures that the cards can not be cloned.???
He also urged the Bangladesh Bank to introduce PCIDSS (Payment Card Information Data Security Standard) in the country. “It is a standard on how the payment processor will run their shop. It will ensure basic level of security in the electronic payment system.???
In 2012, the company processed 34.2 billions transactions, a 25 percent year-on-year, according to the company’s annual report.
MasterCard has so far entered into partnerships with 11 financial institutions in Bangladesh.

suman.saha@thedailystar.net

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