MFS takes a dip after Eid bonanza

Transactions through mobile financial services rose 16.6 per cent year-on-year to Tk 41,403 crore in August, which shows the growing popularity of the digital money in Bangladesh, Bangladesh Bank data showed yesterday.

However, it plunged 34.3 per cent compared to July, when a record Tk 62,999 crore was transacted.

The number of transactions rose 32.06 per cent to 269,697,875 in August but it fell 13.1 per cent from July this year.

Tanvir A Mishuk, managing director of the postal department's mobile financial service Nagad, said before Eid-ul-Azha, there were heavy transactions in the disbursement of salary, wages, bonus and other allowances.

"People also sent a huge amount of money to their relatives. Even people made payment through MFS providers when they bought sacrificial animals."

"It came down in August," he said.

He said financial transactions usually fall in the following month after Eid. This is true for all sectors, not just in the MFS segment.

Shamsuddin Haider Dalim, head of corporate communications at bKash, said transactions through MFS returned to regular state following a huge increase in July.

He said there was an obligation for garment factories to use banks and MFS to disburse wages and salaries of the workers under the government's stimulus package.

Later in August, many companies went back to their own disbursement method as there was no obligation. As a result, its impact was seen in the transactions of August, he said.

Abul Kashem Md Shirin, managing director of Dutch-Bangla Bank, which owns Rocket, said there were a number of events in July, which include Eid. 

"All of these contributed to the historic high of the transactions in the month."

Cash-in and cash-out transactions, inward remittance, person-to-person transaction, salary disbursement, merchant and government payment all fell in August compared to July. Only utility bill payment grew in the month. 

But year-on-year, inward remittance channeled through the MFS segment trebled to Tk 104.75 crore in August, utility bill payment doubled to Tk 908 crore and merchant payment more than doubled to Tk 1,060 crore.

Cash-out transactions, person-to-person payment, salary disbursement and government payment were also in the black in August compared to the same month in 2019. Only cash-in transaction fell to Tk 11,463 crore from Tk 12,524 crore in August last year. 

Shirin said Rocket is promoting the use of quick response (QR) code at the merchant end to move to a cashless system.

"The higher the use of QR code and payment of utility bills, tuition fees and other purchases, the sooner we will move towards a cashless society. All purchases and payments have to be made through MFS operators so that people don't need to carry cash at all," he said.

Mishuk said since the beginning of October, cash-out charges for Nagad customers have been brought down to Tk 9.99 for every Tk 1,000, the first of its kind in Bangladesh.

"As a result, the number of transactions through MFS will accelerate in October."

The number of registered MFS accounts was 9.29 crore in August and active accounts totaling 4.06 crore. It was 7.35 crore and 3.30 crore respectively in the same month last year. 

There are 1,009,430 agents in Bangladesh in August, up from 951,115 in the same month a year ago.

There are 16 MFS operators providing mobile wallet service in Bangladesh.

They are bKash of Brac Bank, Nagad, Rocket, MYCash of Mercantile Bank, Islami Bank mCash, UCash of UCB, t-cash of Trust Bank, First Pay SureCash of First Security Islami Bank, OK Banking of One Bank, Rupali Bank SureCash, TeleCash of Southeast Bank, BCB SureCash of Bangladesh Commerce Bank, Jamuna Bank SureCash, Islamic Wallet of Al-Arafah Islami Bank, Spot Cash of Standard Bank and Meghna Bank Tap n Pay.