How challenging transition to cashless transaction is

Banking has been undergoing transformation at a phenomenal rate. The latest trend apparently runs counter to the very concept of bank serving as a depository of cash or currency. Maintenance of cash -- enormous sums to be precise, is costly. How costly it can be is revealed by Bangladesh Governor Dr Ahsan H Mansur. According to him, Bangladesh has to spend a fabulous sum of Tk 200 billion on management of cash each year. Along with the central bank which alone prints bank notes, 61 commercial banks have to bear the costs of maintenance of idle money, transportation, security, insurance, storage, teller services, and sorting instruments. Printing of each currency note has a cost. If 1,000-taka note costs around Tk5.0-6.0, printing costs of notes of smaller denomination and coins in particular may exceed the value of those notes and coins. In a country where currency notes are subjected to all kinds of abuse, it is not surprising that an additional cost is involved annually with reprinting of 13 per cent banknotes rendered damaged. 

Clearly, cashless transaction and transfer of large amounts of money digitally for payment and other purposes can drastically bring down the expenditure on cash management. The country also stands to benefit immensely if its informal sector governed mostly by black money or unaccounted-for economy, thought to be bigger than the formal one, can thus be curbed. So the positives are many if the country can plan for a systemic transition to a cashless society. That calls for payment of small amounts of daily transaction through QR codes to online transfer of big amounts in financial deals by using financial services like PayiO or wire transfer via banks. Cost-cutting and avoidance of physical contact and hassles in such transactions are highly desirable. 

Yet things are not very simple and straightforward as one would like them to be. Unless cent per cent cybersecurity and digital protection can be ensured, clients are unlikely to be convinced of such transactions. The notorious digital heist at the Bangladesh Bank has not helped the cause. Breaching of cybersecurity cannot be ruled out unless the cyber unit of each bank or financial institution is manned by highly efficient and knowledgeable staff. Then there is the issue of digital and financial literacy, without a reasonable level of which confidential financial transactions can expose such operations to cybercriminals always on the lookout for banking heists. 

Last but not least, the deplorable law and order situation in the country certainly points to make digital transaction safe and secure but the investments made in infrastructure like ATM booths -- so long considered convenient -- are likely to prove to be a waste of money with the booths falling in disuse. Anti-social elements, particularly those looking for innocent victims to commit financial crimes have their own novel way of breaching security codes. In the latest such incident, a 28-year-old young man from Shripur was lured into a private car before taking him hostage and snatching away his debit and credit cards for swindling about Tk600,000 from his accounts in four banks on Saturday last. His flight abroad was scheduled the same night. So without improving the law and order, embarking on a course of cashless transactions may be fraught with danger.