EBL partners with Visa to reduce card operation costs

Tuesday 29 March 2022 14:20 CET | News

Bangladesh-based Eastern Bank Ltd. (EBL) has announced a strategic partnership with Visa to provide a solution that offers trustee services to its member banks. 

The new arrangement is designed to help banks operate card transactions while keeping cash collateral. 

Currently, the worldwide known card processor counts for 29 member banks in Bangladesh and a total collateral of around USD 25 million. However, collaterals for both domestic and cross-border settlement obligations are provided through USD-denominated standby letters of credit (SBLC) issued by the international bank in favour of Visa and, in exchange for the SBLC facility, member banks of Visa provide a commission to the foreign bank, which then makes the payment to a merchant if the card issuer fails to repay the seller. 

The partnership between the card issuer and EBL allows banks to avoid the SBLC for settlement for domestic card transactions, reducing card operation costs. 

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Keywords: mobile banking, online banking, Visa, card scheme, payment processor
Categories: Payments & Commerce
Countries: Bangladesh
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Payments & Commerce

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