• Wednesday, Feb 08, 2023
  • Last Update : 10:24 am

MFS subscribers using the platform more and more

  • Published at 06:18 pm December 10th, 2020
MFS October 2020

P2P transfers overtook cash-out to become the most common MFS transaction in October

That the mobile financial services platform is nimbly making a space for itself among people’s hearts amid the pandemic has been well-established.

But what is more promising for the platform is that people are progressively using MFS to make transfers to one another and make merchant payments, indicating that the money is staying within the system and is not being converted into paper money.

In October, person-to-person (P2P) transfers on the platform stood at Tk 16,566.5 crore, accounting for the biggest share of the total transactions made during the month, according to data from the Bangladesh Bank.

October’s P2P transfers were an increase of 84.3 per cent from a year earlier 11.5 per cent from the previous month.

“This is a gradual development of people finding comfort in digital money and transactions and avoiding conversions of digital money into physical cash,” said Kamal Quadir, the chief executive officer of bkash, the industry leader.

By doing less cash-out transactions, the MFS users are avoiding the cash-out charge.

The cash-out charge for bKash and Rocket users is Tk 18.5 for every Tk 1,000 and for Nagad users it is Tk 11.49.

Only in July, which was a record-setting month for MFS by all accounts, were the person-to-person transfers on the platform were more: Tk 17.293.4 crore. 

This further compliments the government’s overall digitalisation efforts, Quadir added.

“We are promoting our users to do all kinds of transactions through Nagadand we are getting the results of our efforts,” said Tanvir Ahmed Mishuk, managing director of Nagad, the latest entrant to the field.

Meanwhile, transactions through the platform stood at Tk 53,258.8 crore in October, up 41 per cent year-on-year.

October’s figure, which is up 8.5 per cent from a month earlier, is the second-highest since MFS was introduced nearly a decade ago.

“This is a sign of economic recovery -- the informal economy is getting momentum,” Quadir said.

While the platform has always been popular among the unbanked population for sending and receiving money, it has turned out to be particularly handy in making payment at a point-of-sale terminal, salary disbursement and utility bill payment during the pandemic.

In October, merchant payment through the channel stood at Tk 1,746 crore -- the highest yet. It hovered below Tk 600 crore until June, when the economy was reopened. 

The platform, which allows contactless payment by way of QR code, particularly became convenient to make payment at POS terminals in the time of coronavirus, which lingers on surfaces for hours. 

From July, merchant payment through MFS has been exceeding the Tk 1,000 crore-mark.

“People are using Nagad for their regular transactions. And to encourage people to lead a digital life and develop a digital culture in the country, we have recently embraced the tagline of ‘Everything is possible with Nagad’,” Mishuk said, adding that the Bangladesh post office’s digital financial service arm is offering a host of offers to tempt people into using the platform.

Meanwhile, salary disbursement through the platform, which got a boost for the stimulus package announced by the government for the payment of salary of garment workers, appears to be losing momentum.

Salary disbursement through the platform, which hovered was less than Tk 1,250 crore until April, shot past the Tk 2,000 crore-mark from May. In October, it was Tk 1,918.1 crore, down 1.9 per cent from the previous month.

In October, 16.3 lakh new accounts were opened to take the total to 9.6 crore. Of them, 3.3 crore are active, which is the same as in January, in what can be viewed as a worrying development.

Some Tk 15,876.5 crore was deposited in September and 14,657.7 crore was withdrawn.

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