Staff Reporter :
Bangladesh is missing the opportunity to strengthen its digital economy through its mobile payment (MFS) operators on account of inadequate services, narrow transactions limits and focus to limited segments of customers, industry experts said.
As more consumers are now using the contact-less mobile payment tools replacing ATM cards to avoid virus contamination, the volume of mobile banking transaction was Tk 67966.8 crore in November, 2021- much higher than credit card transactions of Tk 2092.4 crore, according to Bangladesh Bank.
During July-November period of the last year, MFS transactions recorded 26.47 per cent growth when the growth in credit card transaction was 32.42 per cent.
“MFS reduces the costs and risks of handling cash, increase the ease of conducting online transactions, and increase transparency among monetary transactions among people,” a BB official said.
But a large number of multi-classes people are yet to use MFS due to limited services offered by the providers and existing transactions limit set by the regulator.
“The limits are too small for many affluent consumers, businesses and micro merchants to meet their needs and very low compared to limits set by central banks in other economies,” said Amin Uddin, a traders in Gulistan area.
In 2020, when the Covid-19 hit the entire world population and economy, BB raised the monthly transaction limit to Tk 2 lakh from Tk 75,000 and set the highest limit for each transaction at Tk 10,000.
The Central Bank of Kenya, in the same time of pandemic, increased the transaction limit to Tk 150,000 in order to reduce the use of cash in the economy facilitating increased use of mobile money transactions instead of cash.
As the demand is growing, industry experts said BB should break the existing limit to enable millions of shoppers and merchants use digital money in their purchases, which will strengthen our digital economy bringing more economic actors under digital payment networks.
MFS has now become an essential part of the lives of all strata of citizens of Bangladesh. Even though cash and credit cards are still widely used by many of the consumers, MFS such as bKash, Nagad or Rocket promises to replace current payment methods in the long run.
bkash is leading the curve with a global standard app and seamless service, which enables customers to make payments faster and to pay in more places. With bKash app, now more people are buying essentials, branded goods, goods, pay utility bills and school fees and use in coffee shops, crowded kitchen markets and send gifts to their relatives.
A new study says the global mobile banking industry is expected to reach $1,824.7 million by 2026, while digital remittances are expected to jump 45 per cent between 2021 and 2025, to $428 billion.
“Bangladesh Bank can boost the country’s digital economy breaking the existing MFS transaction limits to attract people of all segments. However, it should strengthen supervision to restore the conducive environment and ensure a level playing field,” experts said.
