EXPERTS have suggested Mobile Financial Service (MFS) providers to cut cash-out charge down to a single-digit as high transaction cost is keeping marginal people as well as more micro and small enterprises (MSEs) away from availing these services. They also urged the regulator – Bangladesh Bank (BB) to intervene in MFS charge by imposing ceiling to materialize the government’s ongoing digital Bangladesh campaign.
e-Commerce Association of Bangladesh (e-CAB) Director Ashish Chakraborty said cash-out charge in Bangladesh as much as high compared to other countries in the world and it should be single-digit to boost country’s financial inclusion and digitalization process. At this moment, cash-out charge is Tk. 18.50 for per Tk. 1,000 although the agents of MFS providers have been charging Taka 20.
Meanwhile, Nagad, a MFS arm of Bangladesh Post office (BPO), has reduced cash-out charge to Taka 9.99 for every Tk 1,000 cash-out to make transaction process of customers easier and comfortable. Although Nagad has slashed charge categorically, other carriers are still reluctant to do it rather they are in persuasion against this move of Nagad which would give benefit to the customers.
It is obvious that Nagad — being the new kid on the block, would try to get people to sign up to their service to capture market share. But the other new kids on the block like Rocket and Ucash have done nothing to reduce their profits. This is because the main pathway for any MFS to make money is through its cash out charge.
No MFS can make money if the cash is used within its system. So cash out charge remains the only pathway for it to make money. Its easy for Nagad to reduce charge as it’s a government provided service which is an arm of the Bangladesh Post but no other MFS will have the ability to be cross subsidised by its parent organisation like Nagad.
Rather one can say that such competition is unhealthy as it may force people to switch to Nagad only for it to suddenly charge more of other MFS can’t find it viable to sustain in the long term. So we should address the main issue among operators of MFS which is interoperability. No one can send funds to another MFS account as one can do if one has different bank accounts. So finding out a profitable way to maintain interoperability is of the essence.
