Digital payments through mobile devices are getting popular, and hopefully, it would soon help widen the aspect of financial inclusion. In Bangladesh, there are 59 scheduled banks with more than 10,000 branches. Yet 40 per cent of the population is still unbanked – a situation that has given rise to the mobile financial service (MFS). This financial technology proved highly beneficial in reaching out the government’s initial stimulus package of Tk 5,000 crore to the workers of export-oriented garment industries last year.
Set up by Brac Bank, bKash has shown the MFS way in Bangladesh. Today, bKash owns the majority of the market share, followed by Rocket, Nogod and Upay. On the back of its wide network, bKash has acquired a huge number of users. About 45 per cent of MFS is channelled through bKash, 29 per cent through Rocket, and the rest by other MFS providers. Since March 2020, it has added 14,420,370 new customers. Other MFS providers have also had significant customer acquisitions.
The success of MFS will also depend on the availability of proper devices and supportive contents. It is a matter of genuine concern that the government is likely to hike the corporate tax on MFS up to 40 per cent from the existing 32.5 per cent. This may be a significant blow to the budding MFS industry, where providers need to make a massive investment in technological innovations to ensure customer-centricity. None of them has made a mentionable profit yet.
The MFS has also become a favourite platform for migrant workers because of its swift transaction mode and faster transfer of funds to beneficiaries. The biggest issue would be the security of transactions. It is now well-accepted that MFS has been acting like a life jacket, giving us a sense of assurance in cruising through the pandemic challenges. As digital transactions will become the new normal, it would also help narrow down the digital divide sooner than expected. The government should provide policy support and regulate the MFS for secured transactions. The MFS need policy support to bring unbanked people under the banking system and achieve financial inclusion of all people.
