Shiyo: An inventive scheme to spread card payments everywhere

As of 2020, there were 60 million bank accounts in Bangladesh, according to Bangladesh Bank. In 2021, there were  30 million debit card users and 1.8 million credit card users. 

One percent increase in card usage increases the GDP of developing countries like Bangladesh by 0.02%, according to Moody's Investors Service. For Bangladesh to tap into that potential, however, there is a market gap. Card use is by and large restricted to big merchants. 

"In Dhaka, every other adult uses bank cards (debit/credit/prepaid). But the option to use these cards for payments at grocery shops is limited and only confined to big retailers like Agora, Meena Bazar etc. We need a system that allows card payment on a broader scale,"  said Nijhum Islam, founder of Shiyo and an economics graduate from East West University, who is currently working in the financial industry.

To address the setback, Nijhum conceptualised his brainchild 'Shiyo', which is designed to increase customers' convenience by offering them multiple ways of payment. Shiyo is a mobile POS (point of sale) system that lets merchants accept card payments by using smartphones.

Shiyo focuses on solving offline payment issues for now. All you need to do is swipe, dip or tap with your bank card on Shiyo's device. Merchants will process the payment on their end through their Shiyo merchant app while customers will receive text receipts on their phone.

How does Shiyo work?

Debit and credit cards are one of the most revolutionary products in the history of banking. Payments through POS machines have undoubtedly made our lives easier. 

However, we cannot use our cards everywhere. As a result, we have to be heavily dependent on cash to make small or big payments at local shops. According to Bangladesh Bank, the cost of cash dependency to the economy is Tk9,000 crore annually. 

POS machines provided by merchant banks are costly. It is not reasonable for banks to provide these machines to every merchant. As of 2021, there were only 100,000 bank POS machines throughout Bangladesh. Merchants on average pay Tk273 crore in transaction fees a year just to accept cards in their POS terminal.

"For a convenience shop owner, who runs his business in a small locale, the transaction fees are a huge cost, and this is why using POS has never been feasible for them," said Nijhum.

Shiyo's POS machines are much more economic than regular ones. They are also less complicated and mostly work like card readers.  

Photo: Courtesy

Once the customer has swiped her/his card through the POS machine at the store, the transaction information will be passed on to the merchant end where the merchant will receive a notification on her/his Shiyo merchant app. 

The rest of the process is done by the merchant in the app, and the money will get transferred to the merchant's account in no time. The merchant can request for a next-day payout. 

Shiyo wants to make card payments more accessible for micro-merchants by charging the minimum amount for swipes, and no subscription fees for POS devices. 

Moreover, merchants can track their business data through a personalised dashboard and smart reporting recorded in the app. These free services from Shiyo will help merchants gain greater control over their businesses, inventories, and finance. 

In the future, Shiyo wants to collaborate with scheduled banks to provide credit solutions to merchants. 

Is the market ready to adopt this platform?

According to Nijhum, the past few years have been revolutionary in the mobile banking sector. The penetration of mobile wallets like bKash and Nagad has activated the market quite adeptly.

"Local merchants are now well aware of digital/mobile banking. I believe this is the right time to introduce a system like Shiyo," he opined. 

Bangladesh Bank is putting greater emphasis towards moving to a cashless society and recently issued a circular to allow banks to use NFC (near field communication) in their debit/credit cards. 

Bangladesh Bank also introduced a new concept called White Label ATM and Merchant Acquiring Services (WLAMA), through which accepting card payments will be easier, encouraging more players to come into the market and lay the infrastructure. The number of card users is also growing every year.   

"The generation is moving towards a cashless society. No wonder, platforms like Shiyo will take over the market in the coming days," said Nijhum.

For the time being, the biggest challenge forecasted by Nijhum is the security aspect, as money fraud in MFS is highly prevalent in the country. 

Team Shiyo is soon to sit with Bangladesh Bank to close the deal and ensure necessary security measures. They will also hire cybersecurity professionals to make sure that Shiyo is a secure medium of payment.

Shiyo started with the investment of its founding members. The startup is actively looking for local and international investors for further development.

Can Shiyo beat MFS providers?

The founders believe only time will tell whether Shiyo can beat MFS providers. But their personal opinion is cards are most definitely easier to use for consumers. All you have to do is swipe, no need for cell phones or worry about internet connection.  

"If you have a card, just use it. If I am a customer and I get both the options [MFS or cards] available, I would go for cards," said Hyacinth Zia, co-founder and chief financial officer of Shiyo. After completing her bachelor's from Western University in Canada, she is now working as a researcher at a public health organisation.  

As of now, Shiyo is a team of eight people. The startup is in its pre-seed stage and will soon launch officially.