In whose hands will the Bosnian telecom operator that will control electronic payments be?

In Bosnia and Herzegovina, political officials have not yet grasped the banking sector as a serious state resource, writes the Patria News Agency.

Experts warn that it is necessary to strengthen domestic banks and regulate this area in such a way that the state benefits and protects the citizens of BiH.

Adisa Omerbegović – Arapović, a macroeconomist, answering questions from the Patria News Agency, says that when we talk about fees and taxes, i.e., payment transactions, she believes that the state has not sufficiently utilized the opportunity to protect citizens' interests.

– First, these fees are high, and the question arises as to how high these fees really need to be and whether there is any regulation, whether there is anyone's monopoly. The question arises as to why the state has not retained the ability to control payment transactions in such a way that it collects rewards or any fees from payment transactions – says Omerbegović – Arapović.

Also, in developing economies, internet and mobile penetration are considered higher than banking penetration, which gives telecom companies better marketing opportunities for financial products for their clients, given their easier reach to them, explains this expert.

– Another reason cited is that telecom operators do not suffer from the bad image of bank collapses after 2008-2009, thus leaving room to attract users in younger segments by creating the image of "banking without banks".

As a result, the convergence between banks and telecommunications will become increasingly dynamic.  

– The fact that cash payments will have less and less importance in the future is indicated by the fact that in some countries around the world, the trend of its declining significance has been present for a long time – states Omerbegović-Arapović.

On the contrary, the trend of internet payments is becoming more widespread. Thus, two Nordic e-payment companies recently announced that they would be sold to foreign companies.

Namely, on September 25, Nets, a payment company based in Denmark, announced that it would be sold for $5.3 billion, and Bambori, a payment company located in Sweden, was offered $1.7 billion in July.

Nordic residents have long been accustomed to paying by card, and now they can also do so by phone. Their governments have also been pioneers in providing online services. As more and more retail businesses go online, payment companies have become very attractive targets. 

Thus, some telecommunications companies are becoming banks to succeed in e-payments. In Pakistan, Telenor faced the mandatory re-registration of all active SIM cards in 2015 and turned this otherwise costly process into an opportunity to provide more sophisticated mobile financial services thanks to the additional data it has on users – explains Omerbegović-Arapović.

Operators have realized that to succeed in creating opportunities to provide financial services, they must invest a lot, or perhaps become banks themselves. For example, in France, Orange plans to launch Orange Bank in 2017, a mobile-centric retail bank offering current and savings accounts, credit, and payment transactions. Another example of a telecommunications company buying a bank is Telenor Pakistan, which bought the remaining 49% of Tameer Bank, making it wholly owned by the Telenor Group. 

– Cash payments will certainly not disappear in the near future, but it is clear that it has long had a replacement that is becoming increasingly important in the field of payments. As can be seen in the examples of developed countries, electronic payments are becoming a trend that is spreading worldwide, and telecommunications companies can play a significant role in this process.

Therefore, the question arises whether this is the purpose of future telecommunications companies? If so, then it raises an even more important question – in whose hands will our telecommunications company that will control electronic payments be? – points out Omerbegović-Arapović.