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23 October, 2018 12:27:58 AM

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Mobile payments see dramatic spurt

TAREQUE MORETAZA
Mobile payments see dramatic spurt

The use of mobile wallets to pay shopping bills is increasing day by day. The latest statistics of the Bangladesh Bank (BB) show that such payments rose by 62.5 per cent in August compared to July.

According to the central bank’s data, such merchant payments totalled Tk 206 crore in July but increased to Tk 334.76 crore in August.

In the same period last year (July), it was Tk 100.16 crore. In August last year, it was Tk 137.21 crore. It has increased 3 times when compared on a yearly basis.

“This could increase further if the service-providing banks charge less from the merchants,” said Syed Rashidul Hasan, a professor of the Marketing department of Dhaka University (DU).

Earlier, mobile financial services (MFS) were being used to pay bills only at big shops. But now it has started at the small shops as well.

Customers are buying shoes using mobile wallets at a small shoe store at Bashir Uddin Road in Kalabagan. “This has not seen earlier,” said Ferdousi, a client of mobile banking services.

“This is a big advantage. Rather than carrying cash, it’s good to save money in a mobile account,” she said.

If you use a VISA or MasterCard, many times it may not work at point of sales (POS) machines. But there is no possibility of this in the case of mobile wallets as these are run by unstructured supplementary service data, explained Ferdousi.

However, sometimes users have to pay additional charges. In case of mobile wallet payments, an additional charge can be levied anywhere.

Shawkat Hossain said, “If you buy electronic items, then you will face this problem. The companies say they have to charge, and so they take it from the buyers. The same problem is also faced in the cases of card payments,” added Hossain.

Therefore, a large barrier to the transactions is the extra merchant charges, a recent study noted.

A lack of awareness, the high security risk and insufficient transaction limits are also hampering the growth of MFS, according to the study, titled ‘Mobile financial services for MSEs in Bangladesh: Prospects and challenges’.

The study noted that nearly eight million MSEs exist in Bangladesh, among which 46 per cent use MFS for business purposes. It revealed that 32 per cent of the MSEs made at least one business-to-business transaction. But the high transaction costs keep more than half of Bangladesh’s micro and small enterprises (MSEs) away from using mobile financial services for business purposes.

The study was carried out among 500 MSEs, 64 per cent of which do not use MFS because of the high transaction fee.

Among the MSEs surveyed, 27 per cent blamed insufficient transaction limits for not using the digital transaction channel. Some 20 per cent of the respondents demanded incentives for using MFS.

The study noted that some 94 per cent of the MSEs use the service only for cash-out purposes. The study surveyed three sectors: agriculture, manufacturing and service. The service sector accounts for the highest concentration of MFS users.

According to a GSMA report, approximately 65 million people have access to a mobile phone, but remain unbanked. The use of mobile money services can be increased by digitising more payment streams—for example, wage payments can be digitised in garments factories or payments and agricultural subsidies can be digitised for farmers to procure crops.

In Bangladesh, some 18 million new mobile money accounts could be added by 2020 from digitising business-to-person (B2P) and government-to-person (G2P) payments, depending on the number of farmers engaged in formal value chains. Mobile operators could derive an estimated USD 57 million for B2P payments and USD 6.6 million for G2P payments by 2020.

EA

 

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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