'We seek to build a secure, affordable MFS ecosystem through innovations'

Since its launch in March 2021, upay has focused on addressing the pain points of customers such as cash-out charges and registration hassles through innovations in terms of security, convenience and affordability.

We seek to bring positive changes in the behaviour of customers and improve the country's entire ecosystem of mobile financial services (MFS), said Ziaur Rahman, chief strategy officer of upay, during an interview with The Business Standard.

Tell us about the journey of upay. Where does upay want to go in the next 5 to 10 years?

upay is the mobile financial service (MFS) brand of UCB Fintech Company Limited – a 100% subsidiary of United Commercial Bank Limited (UCB). It has been created to provide services to the common people at an affordable cost through a secured platform. 

upay launched its commercial operation on 17 March 2021 after obtaining a licence from the Bangladesh Bank in December 2020.  Since its launch, upay has made customer security its first priority along with a slew of benefits, including the lowest cash-out charges, free send money, free utility bill payment etc. 

Powered by blockchain technology, upay has developed its core platform with an in-house technology team. And with a device authentication system, the platform is fully secured from any type of social engineering possibly attempted by fraudsters.  

upay has envisioned bringing innovation in terms of security, convenience and affordability. Our target is changing the behaviour of MFS customers and improving the total ecosystem. 

Our parent company UCB is ready to invest as much money as upay requires to grow competitively. Currently, we have around 70 lakh customers and more than one lakh agents, serving almost every corner of the country.

There are around 13 MFS providers in Bangladesh. How is upay different from others?

From the very beginning, upay has focused on addressing the pain points of customers through innovations. The major pain points of MFS remain cash-out charges and registration. Considering the notion upay focused on reduced cash-out charges and easy customer registration. 

We try to address the issue of cash-out charges in a different way with the help of platform flexibility. We have introduced the multi-wallet feature to offer different cash-out rates for our customers. 

Multiple wallets include a common primary wallet, salary wallet, remittance wallet and disbursement wallet. Charges of different wallets are ranging from Tk14 per Tk 1,000 in different layers to even free of cost. Also, our pricing policy is guided by the principles of 'Simple Pricing' – the same charge for both the app and USSD which is a communications protocol used in GSM networks for sending short text messages.

Besides, we are offering the lowest cash-out rate for USSD users. More than 70% of MFS users conduct transactions through USSD despite the rising availability and use of smartphones. Most of them are low-income group customers. 

Considering the situation and to ensure financial inclusion, upay offers the lowest cash-out fee for customers who do transactions through USSD which is Tk14. The cash-out fee remains the same for the app users too.

For easy registration, we have launched a unique yet simple and compliant upay account opening process in cooperation with the country's largest mobile phone operator Grameenphone. 

The Grameenphone customers can open upay accounts by simply dialing upay USSD code *268#.  As a result, the customer with a feature phone can open his or her upay account instantly.

Alongside, upay and Grameenphone, together, brought in mobile recharging services using Grameenphone's USSD code *121# for the first time in the country.  

upay users can also bring money into their accounts from any bank offering internet/app-based banking services through the National Payment Switch Bangladesh (NPSB) network, which is also the first of its kind in Bangladesh.

Besides regular MFS and bill payment products, upay offers some unique services exclusively available for upay customers, including payment of traffic prosecution fines, Indian visa fee payment, and Titas gas (prepaid) bill payment.

Transactions between MFS accounts of different operators are now possible after the launch of Binimoy/IDPT.  What is your view on interoperability?

Interoperability is a very important element for the overall development of mobile money transactions. This gives the customers the freedom to send and receive money from any MFS account. 

I think this will scale up the MFS transactions to a significant level. However, we have not connected with Binimoy – an Interoperable Digital Transaction Platform (IDTP) yet. We are working with the relevant authority to join the platform soon.

The primary objective of launching MFS was to create financial inclusion. Do you think we have reached that goal? What lies ahead for the MFS industry in Bangladesh?

Bangladesh has around 183 million registered MFS accounts as per the latest statistics from Bangladesh Bank. More than half of the adult population in Bangladesh has MFS accounts now. 

This is a very encouraging number because less than 30% of the population has bank accounts. Most of these MFS account holders were unbanked and did not have access to any financial system. So, MFS have converted to formal and regular financial services from informal ones. Therefore, financial inclusion has reached a certain point. 

But to create a true impact on the MFS sector, we need to work on increasing the active base. The number of active customers is only around 35% (as per Mobile Financial Services comparative summary statements of July 2022 and August 2022 by Bangladesh Bank). 

To do so, we have to develop products and services considering customer-specific needs other than sending money. In this case, people's behavioural changes toward digital cash and smartphone penetration are very important for the expansion of the market. 

The market is still dominated by cash-in and cash-out transactions. We have to create an ecosystem so that customers can make all sorts of financial transaction activities from their mobile accounts. 

A good thing that happened due to the pandemic is changes in customer behaviour toward digital payment. It will help the operators to make the users adopt digital transactions through MFS. 

The government can also help to foster the growth of the sector through policy supports, for example, providing subsidies on smartphone purchases, tax rebates on digital payments etc.