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Overview of MFS providers in Bangladesh

Published : Saturday, 1 January, 2022 at 12:00 AM  Count : 2232
Shaikh Shahrukh

Overview of MFS providers in Bangladesh

Overview of MFS providers in Bangladesh

Mobile Financial Services (MFS) are currently the most important and quickly developing embodiment of Financial Technology, particularly in our country. MFS is currently playing an important part in Bangladesh's financial industry, as well as facilitating financial transactions for people of all classes and professions. Despite significant challenges as a developing and overpopulated country, Bangladesh has enormous chances and promise in this area.
Agents approved by the bank typically facilitate mobile financial services, allowing mobile account holders to transact in the absence of individual agents outside of bank facilities. Cash In/Out at Agent Point, Cash Out at ATM, Balance Inquiry, Airtime Purchase, Utility Bill Payment, P2P Fund Transfer, P2B Payment, B2P Fund Transfer, G2P Fund Transfer, Merchant Payment by Customer, Inward Foreign Remittance Disbursement, Wallet Activation, Bank Account to MFS Wallet Fund Transfer, MFS Wallet to Bank Account Fund Transfer, Fund Transfer from Card to MFS Wallet, Mini Statement Collection, and other services are included in MFS.
Bangladesh today has 61 banks with 10,467 locations reported by Bangladesh Bank. Following this in 2011, mobile financial services were launched by three private banks - Dutch Bangla Bank Limited (DBBL), BRAC Bank Limited, and Trust Bank Limited. Among them, BRAC Bank's "bKash" and DBBL Mobile Banking (now "Rocket") have become very popular MFS in a very short time besides now a day's Nagad, a Digital Financial Service (DFS) of Bangladesh Post Office (BPO), is successfully providing the MFS throughout the country with minimum level of costing. Information is taken from respective MFS provider's website.
Since the launch of these services, financial inclusion in Bangladesh has been increasing significantly, especially after 2013. Although still in most cases the use of the MFS is limited to just Cash in/out transactions, P2P transactions, airtime purchases, online purchase and certain bill payments.
Though there are 16 MFS providers in this country, bkash and Nagad are mainly dominate the sector by holding the largest amount of market share. Among all, Nagad has been showing quite a positive growth in recent times. All the MFS have mobile apps with various features available for their users as well as they can avail of the services through USSD codes.
Mobile Financial Services (MFS) is a technique of delivering financial services that combines banking with mobile wireless networks, allowing customers to conduct banking and other financial transactions using their mobile devices. Simply put, it allows users to move money or funds between their mobile accounts. Users can manage their mobile accounts through USSD (Unstructured Supplementary Service Data), SMS (Short Message Service), and certain phone apps.
Overview of MFS providers in Bangladesh

Overview of MFS providers in Bangladesh

Nagad
Nagad, a Digital Financial Service (DFS) of Bangladesh Post Office (BPO), is successfully providing the MFS throughout the country. In 2018, BPO merged its previously launched Money Transfer System (EMTs) and Postal Cash Card and reintroduced them as Nagad. Since it's offering a wide range of MFS and has become quite popular. Though from the beginning, it provides demanding services like Cash In/Out, Send Money, and Mobile Recharge, services like Bill Payments, Deposits (Sanchay) are currently available.
Nagad is the first country in Bangladesh to have introduced an account opening process by uploading the picture of both sides of a national identification card through the mobile app. Hon'ble Prime Minister Sheikh Hasina inaugurated Nagad on March 26, 2019 byopening her own account in this process. Although the process was initially criticized bymany, later MFS operators, banks and other financial institutions started following thesame procedure to open accounts. This year, 35 lakh accounts have been opened withNagad in this process.
Nagad has played a key role in ensuring transparency in the disbursement of allowancesamong the marginalized beneficiaries. Under this process, more than 98 lakh newaccounts have been added to Nagad network. The government has disbursed BDT 5,065crore under the social safety net programmes in the last financial year through MFSoperators, of which 75 per cent was disbursed by Nagad.
bKash
bKash, one of the very first MFS providers of Bangladesh, captures over 80% market share that makes it the market leader of this sector. Operating as a subsidiary of BRAC Bank, it was started as a joint venture between BRAC Bank Limited, Bangladesh, and Money in Motion LLC, USA. Following the remarkable success and impacts of bKash on the country's financial systems, the International Finance Corporation (IFC) became its equity partner in 2013 and Bill & Melinda Gates Foundation became its investor in 2014. Again in 2018, Alipay, an affiliate of Alibaba Group, became another international investor in the company. Associating with all the five Mobile Network Operators (MNOs), bKash has successfully spread MFS throughout the country. Currently, it has more than 180,000 agents countrywide and over 30 million registered accounts.
Rocket
Dutch Bangla Bank Limited (DBBL) is the pioneer of providing banking services through mobile networks in Bangladesh. DBBL Mobile Banking was the first MFS to provide a wide range of financial services. In 2016, it was rebranded as Rocket along with more extensive services than before. Currently, it is the second-largest MFS provider in the country holding over 17% market share. The number of active users of Rocket is more than 18.2 million and it has about 267,000 agents operated by 277 distributors across the country. From the beginning, Rocket has been providing some additional benefits to its users, e.g. withdrawals from bank branches and ATMs. It's also well ahead in terms of services like corporate money collection, salary payment, allowance payment, scholarship payment, etc. At present, 611 organizations of the country pay salaries and allowances through Rocket accounts.
Upay
Upay is Bangladesh's 1st cryptographically secured QR (Quick Response) Code based digital payment system of UCB which can be used in payments that include purchasing of goods and services from a physical or online merchant, fund transfer from other banks debit/ credit cards, mobile top-up, insurance premium, ATM Withdrawal, etc.
SureCash
SureCash is a dynamic MFS platform launched by Progoti Systems Limited in 2014. It's an open network of payment services in partnership with 4 local banks in the country and 1,500 payment partners. The associate banks of this network include one of the largest state-owned banks - Rupali Bank Limited. According to the officials of SureCash, they have 180,000 retail agents countrywide and serve 20 million customers. They have developed their proprietary technology, especially focusing on utilities, education institutions, government educational programs, etc.
MyCash
MyCash is another potential MFS launched by Mercantile Bank Ltd in 2012. Currently, it has network connectivity with every Mobile Network Operator (MNO) of Bangladesh and provides a wide range of financial services. There are over 95,000 agent points of MyCash throughout the country and it has more than 840,000 subscribers.
mCash
mCash is the mobile financial service of Islami Bank Bangladesh Ltd. Through this MFS, users can get Islamic Shari'ah based banking services. mCash enables its users to withdraw money from branches of the bank and ATM booths. It also has a good number of agent points countrywide.
Mobile Financial Services (MFS) are currently the most important and quickly developing embodiment of Financial Technology, particularly in our country. MFS is currently playing an important part in Bangladesh's financial industry, as well as facilitating financial transactions for people of all classes and professions. Despite significant challenges as a developing and overpopulated country, Bangladesh has enormous chances and promise in this area.
Regulation for Mobile Financial Services (MFS)
The central bank of Bangladesh announced regulatory rules for MFS - "Guidelines on Mobile Financial Services (MFS) for Banks" - after a lengthy assessment and ad hoc permissions on MFS on September 22, 2011. In December of that year, it was changed again. Only the bank-led model of MFS would be approved in Bangladesh, according to the guidelines. As a result, a customer's MFS account that is accessible through his mobile device will be referred to as a "Mobile Account" and will be held by his bank. It will also be a non-chequing account, as opposed to a conventional banking account.
Current Situation of Mobile Financial Services (MFS)
MFS is currently offered by 15 banks in the country, with over 1.03 million agents. The Bangladesh Post Office, in addition to banks, offers MFS through its Digital Financial Service (DFS) platform. As of July 2020, there were 925.73 million registered MFS users, with 426.78 million active accounts (as per transacting within 3 Months). In that month, the total amount of transactions through these accounts was TK 62,999.42 crore. Furthermore, MFS gains a significant boost as digital transactions become increasingly essential in the current COVID-19 epidemic. These services have become the most common way for the government to distribute allowances and incentives. Various government and business entities pay their employees' salaries through MFS system at the same time.








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