Mobile money a monopolistic market: official

The country's mobile financial service market has run into a monopolistic situation, with Brac Bank's bKash capturing the lion's share in both transaction numbers and value, a Bangladesh Bank official said yesterday.

“Competition is seriously missing in this market,” said Lila Rashid, general manager of the Payment Systems department of the Bangladesh Bank, at a roundtable styled 'Mobile Banking, Finance and Digital Security Issue'.

The country's apex trade body, the Federation of Bangladesh Chambers of Commerce and Industry, organised the discussion at BIISS Conference Hall in Dhaka. Subsequently, the policymakers are working to bring in more competition to the market for the greater benefit of customers. The policy is being revised and a new guideline is in the works, she said. As of October 2016, bKash accounted for 89 percent of the total MFS transactions and Dutch Bangla Bank's Rocket only 10 percent, according to Rashid.

In terms of transaction value too, bKash was the clear frontrunner, accounting for about 76 percent of the amount transacted on the platform.

“We hope the entrepreneurs will be interested in operating in the market,” she added.

For building a better future, MFS will be one of the important components, said Abdul Matlub Ahmad, president of the FBCCI.

“By using this channel we can bring in more remittance,” he said, while calling for a 5-7 percent cash incentive for remitters.

At present, 'digital hundi' is prevalent, and the cash incentive would compel them to send the sums through the official channel.

Digital hundi is an illegal transfer of funds from abroad, in which the remitter deposits the amount to a vendor in his host country, who then instructs his network in Bangladesh to deposit the sum to the requested MFS account.

To curtail this practice, the BB brought down the daily transaction ceiling for MFS. Currently, a maximum of Tk 15,000 can be deposited into an MFS account each day, while Tk 10,000 can be taken out. Previously, the daily ceiling was Tk 25,000 for both deposits and withdrawals.

“If the government can give incentives to exporters, then why not to remitters? The migrant workers are earning for the country in 40 degree temperature,” Ahmad said.

Remittance will definitely get an instant boost if the government decides to extend incentive, he said.

In 2016, remittance inflow was at $13.61 billion -- the lowest in five years, according to central bank statistics. The amount is 11.13 percent lower than 2015's receipts.

“We have built a road and if some thieves start to use it, the regulators shouldn't close it off for everybody,” said Kamal Quadir, chief executive officer of bKash.

Rather, the central bank should try to stop the thief. “We are always supportive in such matters.”

All the security challenges that MFS has encountered so far were down to human manipulation; the platform has not been compromised yet, he added.

“The BB does not have the right to hold everyone in its efforts to catch the perpetrator,” said Mustafa Jabbar, president of the Bangladesh Association of Software and Information Services.

There might be no relation between the declining remittance and MFS, he said, while criticising the central bank for its reluctance to formulate guidelines for digital services. Currently, there are 20 MFS licence holders and 19 of them are offering the service.

Last year, a total of Tk 234,691.79 crore was transacted through the MFS channel, of which 42 percent was deposits, 39 percent withdrawals and 14.75 percent person-to-person transactions.

To ensure the security system for any digital services lots of physical infrastructure have been developed, said Shyam Sunder Sikder, ICT secretary.

Bangladeshi consumers spend less than 1 percent of their total annual purchase electronically, while in India and Sri Lanka it is more than 3 percent in each country, said Shameem Ahsan, former president of BASIS and chairman of e-Generation, in his keynote speech.

He also pointed out the mobile operators' interest in MFS and security issues. Syed Mohammad Kamal, country manager for MasterCard, demanded incentives for digital payment system like debit and credit cards.

There are 40 million unique banking accounts but card numbers is around 10 million, he said, while suggesting that the BB can make bank cards mandatory for every account.