Digital financial services see overwhelming demand during shutdown

Ariful Islam, a resident of Dhaka's Mohammadpur, recently collected donations from his friends through a mobile banking service – to distribute relief to daily wage earners and labourers. He chose this contactless method to stay safe while helping people in need.

Like Ariful, now, many people are using digital financial services for different reasons – including mobile banking, internet banking and local payment gateways – during this shutdown period. 

Abul Kashem Md Shirin, managing director of Dutch-Bangla Bank, told The Business Standard, "Economic activities have become static but digital financial services are performing extraordinarily and receiving a great response. Around 70 to 80 percent of our mobile banking service, automated teller machine (ATM) booths, agent banking, and payment getaways are being used during this lockdown."

Abul Kashem expects that the lockdown will habituate people with using electronic transaction platforms and help the government create a cashless society.

The country's largest mobile financial service provider, bKash, also made a great leap in digital transactions. bKash recently introduced an "Add Money" option to its app to transfer money from visa debit and credit cards to bKash accounts. 

A bKash official said money transfers and utility bill payments through their app increased over the last two weeks. "On March 24, 1.5 lakh clients across the country paid their electricity bills through bKash."   

bKash's data shows that its clients made around 1.70 crore transactions between March 26-28 – the average daily transaction being 55 lakh plus. 

Recently, Bangladesh Bank increased the limit of mobile banking transactions. Now a registered client of a mobile financial service provider can transact up to Tk2 lakh per month – which used to be Tk75,000. Even for daily cash out, of up to Tk1,000, no service charge is made.

Bangladesh Bank also withdrew its merchant discount rate and interchange reimbursement fee for the purchase of essential commodities and medicine using debit and credit cards. 

Considering the current situation, Mutual Trust Bank recently increased its customers' daily withdrawal limit at ATMs from Tk50,000 to Tk1 lakh. 

City Bank, United Commercial Bank, AB Bank, IFIC Bank, Dhaka Bank and NRB Bank cancelled interbank cash withdrawal charges at ATM booths. Generally, banks charge Tk10 to Tk15 for interbank ATM transactions.

According to Bangladesh Bank data, in January, the debit card transaction value of the country was Tk15,269 crore and the credit card transaction value was Tk1,357 crore. 

Data shows that e-commerce transactions in January totalled Tk269 crore. In that month, the number of total internet banking users crossed 25 lakh and monthly transactions totalled Tk6,669 crore.

Now, 15 banks provide mobile financial services and the total number of their active account holders is 2.70 crore. In February, the average daily transaction value of mobile banking was Tk1,425 crore. 

Currently, 21 banks are providing agent banking services with a total 8,118 agents at 11,550 outlets.