France's IT company—eServGlobal—is set to establish a hub in Bangladesh to offer innovative and low-cost mobile banking services.
The hub, known as interoperability platform, will enable banks to provide mobile financial services without investing money in network development.
The company yesterday signed a deal at Sonargaon Hotel in Dhaka with BDCOM Online Ltd, a local IT company, to set up the platform in six months.
“Bangladesh is an ideal market to build an end-to-end mobile payment ecosystem as the country has already registered an excessive growth in mobile financial services,” said Paolo Montessori, chief executive of eServGlobal.
The joint venture initiative will further enhance the growth of mobile financial services in rural and urban areas, he said.
“We are pleased to partner with eServGlobal to take advantage of their global expertise and experience in the technology world, particularly in the field of mobile commerce,” said SM Golam Faruk Alamgir, managing director of BDCOM Online Ltd.
“A synergy with such a partner will provide a strong base for BDCOM to set up a robust platform to provide an advanced and extensive suite of mobile financial services in the Bangladesh market,” Alamgir said.
Currently, Bangladesh is pursuing a bank-led model, where banks have to invest a significant amount of money in IT infrastructure due to a lack of such hub. Banks will be able to use the interoperability platform at a certain fee.
Launched in 2011, the number of mobile banking subscribers in Bangladesh has already crossed 13 million.
Mobile banking registered 186 percent growth in cash transactions last year thanks to the growing popularity of the services, according to Bangladesh Bank. The number of subscribers grew 262 percent to 13.1 million from January to December in 2013.
In 2013, the value of mobile banking transactions stood at Tk 6,642.61 crore in December, up from Tk 2,320.02 crore in January, according to central bank data.
It is observed that person to person money transfer—'cash in' and 'cash out'—are the most popular types of transactions.
As part of the government's financial inclusion programme, the central bank allowed 28 banks to provide mobile-banking and 19 have launched the service.
eServGlobal, listed on the Australian Securities Exchange and the London Stock Exchange, offers the full spectrum of mobile wallet, mobile commerce, recharge and agent management features.
The company has also developed a leading international remittance hub, HomeSend, in partnership with MasterCard and Belgacom International Carrier Services, a Brussels-based firm who delivers international wholesale solutions to any communication service provider worldwide.
HomeSend has live deployments in 50 countries and commercial contracts with mobile network operators and money transfer operators that represent more than 1.2 billion subscribers and 200,000 cash agents.
BDCOM, an internet services provider, is already operating in the region. In 2009, the firm acquired SMILE, one of the largest fibre internet broadband service providers in Bangladesh.
A deal will allow BDCOM to extend the reach of its services in the region, said the firms' Chairman Wahidul Haque Siddiqui.