Bank of Bhutan is now a primary member of Visa and MasterCard. This is expected to make easier payment options for BOB customers. With the membership, which is first of its kind in the country, now BOB customers have the options to shop online and travel abroad without having to bear the risk of carrying cash and for increased convenience for the foreigners visiting Bhutan.
Visa and MasterCard are global payments technology companies whose principle business is to connect consumers, businesses, financial institutes and governments worldwide. They provide facilities to process transactions on behalf of financial institutions and customers.
However, we should know that the companies neither issue cards nor extend credit facilities or set fees for the customers. They only provide financial institutions with company-branded payment products so that the financial institutions can use them to offer credit, debit, prepaid and cash-access programs to their customers.
Let’s do a simple illustration to make some concepts clear. For example, a foreigner comes to Bhutan and he has MasterCard or Visa, he can now use it in all BOB ATMs and all POS (point of sale) machines that will be distributed to shops and restaurants in towns and cities. This process is called acquiring. And the opposite process, where BOB issues credit cards to its customers, which they can use to shop online or make payment in other countries, is known as issuing. In other words, BOB extends credit facility to its customers.
In 2010 BOB is expected to launch only acquiring business and issuing will be carried out next year.