Debit card market has huge scope to grow

When the world is evolving towards a cashless society, Bangladesh falls behind others in digital payment system.

But the country can create a cashless society by familiarising its large population with the digital payment system, said a senior official of VISA Inc, which has presence in 200 countries.

Only 3.8 million people use debit cards, while the number is less than one million in case of credit card users, and the debit card activation rate is less than 1 percent, said TR Ramachandran, group country manager of Visa Inc for India and South Asia.

The debit card activation rate shows how many cardholders are using their cards through point of sale (POS) machines. "Most of the cardholders use it at ATMs," Ramachandran said in an interview with The Daily Star in Dhaka yesterday.

Bangladesh market has huge scope to grow, he said.

"The debit card activation rate in many countries, including those in Asia, is between 5 percent and 20 percent. In India it is around 6 percent and in Sri Lanka it is around 3 percent," he said, adding that 570 million people have debit cards in India, which is around 40 percent of its total population.

He said there are only 25,000 POS terminals across Bangladesh. "But the number should be at least 10 times larger than now." The number of debit cardholders should be 40 million, he added.

On the overall economy of the country, he said: "The fundamentals are going in the right direction, despite some political hiccups. Inflation is under control, GDP growth rate is about 6.5 percent."

Now customers should be educated on how they can adopt digital currency, Ramachandran said.

In the past, people had to request banks to get debit cards. But now the situation has changed, and one can get a debit card just by opening a bank account, he said.

"Many of the banks are planning to issue the next set of terminals in semi-urban and rural areas," said Ramachandran, who met with senior officials of several banks during his visit to Bangladesh. VISA Inc has 35 bank clients in Bangladesh.

"It requires long alignment from the central bank, policymakers, banks as well as customer education. We are the facilitator," he said.
Access, enablement and digital commerce are the three pillars to familiarise the use of debit cards. 

As it depends on people's income, Bangladesh will be a debit card-dominated market, the official said.

"It's like a rail line. One line is to issue cards and the other line is to increase the acceptance of cards among people," he said, adding that people can use debit cards for various other purposes such as paying taxes, utility bills and other charges. 
VISA has the capacity of doing 56,000 transactions per second, he said.