Work underway for retail accounts for micro merchant payment

Mobile Financial Service (MFS) companies and banks are working to introduce retail accounts facilities for digital micro merchant payment at the micro and small business level without the need for having a trade licence.

However, the work has slowed down a bit due to the surge of Covid-19 infection in the country.

According to people concerned, micro and small traders will get the facility of opening retail accounts after the completion of system up-gradation works by the companies, which would take three to four months.

MSF company Rocket has already started opening accounts on a limited scale. Another company, Nagad, is opening accounts and doing transactions on an experimental basis. However, BKash, the largest MFS company in the country, said it would launch the facility soon.

At present, shoppers can avail the facility of merchant payment through MFS or card at shopping malls or super shops or outlets of different brands in the cities. These companies have retail accounts as they have trade licences.

However, at the micro and small business level, such as local grocers or drug stores, vegetable markets, roadside mobile food shops or hawkers do not have this facility. The central bank gave them a chance to avail this facility without having to have a trade licence in November last year.

Micro and small traders can open a micro merchant account only with a national identity card and attestation from the local public representative or professional association. Accounts can be opened by banks, agent banking, mobile banking, and payment service providers (PSPs).

However, people concerned said that at these business levels, transactions in mobile banking or QR codes will be popular.

Shamsuddin Haider Dalim, head of BKash's public relations department, told The Business Standard that opening retail accounts for micro-merchant payments is a big project of BKash.

He said, "Works on several phases of the project, including technological development, were going on simultaneously. The work of opening accounts and training by listing the small traders will start soon."

"To roll out these facilities across the country, the government and the central bank need to provide policy support, further develop the network of mobile operators and make smartphones more available," he added.

In the case of micro merchant payments, benefits like cashback can be kept at different stages. Besides, the central bank and the government should also cooperate in the campaign

Abul Kashem Md Shirin

Abul Kashem Md Shirin, managing director of Dutch-Bangla Bank, thinks that good results can be obtained if buyers and sellers can be encouraged to popularise digital transactions at the marginal level. 

He told The Business Standard, "In the case of micro merchant payments, benefits like cashback can be kept at different stages. Besides, the central bank and the government should also cooperate in the campaign."

He said that their MFS company Rocket has already started limited access to merchant accounts for small traders without a trade license. Work is underway to provide facilities on a large scale.

Abul Kashem said that since traders have to spend separately for POS (point of sale) machines, transactions in MFS and QR codes will gain popularity at the marginal level. In this case, the merchant payment facility can also be obtained by using his bank's Nexus Pay apps.

City Bank is working on the facility of opening a QR code-based retail account at the small business level. Buyers and sellers will benefit from card transactions by scanning the QR code through their mobile apps.

A senior official at the City Bank said that their initial goal was to create 50,000 accounts. This facility will be fully operational by the end of this year.

Ashish Chakraborty, chief operating officer (COO) of Nagad, said, "Nagad is undergoing a robust preparation to facilitate the micro merchant payment through its intelligent payment platform and will launch the service within the next few months." 

"Now we are upgrading our technology with the process and will onboard the micro-merchants as per the directive of the Bangladesh Bank. We already ran a limited basis piloting nearby our office, mostly on the floating hawkers to test the process and we are satisfied with our preparations," he added.

Ashish Chakraborty said, "Following the directive of the central bank, we had fixed a target to launch the micro merchant payment facilities through Nagad, but for the new development of the Covid-19 situation and the lockdown, we are revisiting our mark."

"Our target is to onboard about 80,000 micro-merchants within the next few months and here street vendors and Facebook-based commerce are our main importance," he further added. 

However, Sirajul Islam, spokesperson and executive director of Bangladesh Bank, said that the central bank is ready to provide all kinds of assistance to popularise digital transactions to make a cashless society.