MOBILE FINANCIAL SERVICE

Customers complain of high charge: study

The high service fee charged by mobile financial service (MFS) operators is turning out to be a major impediment to the growth of the sector, a recent study found.

Some 53.25 percent of the respondents identified the high charge as a major disadvantage of MFS, according to survey report “An Impact Study on Mobile Financial Services in Bangladesh”.

The survey was conducted among 1,065 households and 265 small and medium business firms spanning 36 districts.

Currently, the MFS operators charge 1.85 percent for withdrawing cash but agents take 2 percent from the customers. As a result, a customer has to pay Tk 20 for taking out Tk 1,000.

Kamal Qadir, chief executive of bKash, agrees that the charge is on the high side, but adds that not all services were charged.

Introduced in 2012 by Dutch Bangla Bank, the MFSs include cash deposit, cash withdrawal, money transfer and bill payment.

As of September, the total number of registered accounts under the MFS platform is 6.67 crore, according to data from the central bank.

Currently, about 18 banks are providing MFSs, and the daily average transaction value is Tk 1,000 crore as of September.

Illegal remittance from foreign countries and extortion by criminals using the platform are the other two big challenges, found the survey conducted by Bangladesh Bank and the University of Dhaka in December last year.

Saudi Arabia, Malaysia and the United Arab Emirates are the main origins of illegal remittance inflows. But Canada, the US, India, Kuwait and Qatar were also mentioned in the survey.

A syndicate in the countries collect money from migrant workers and get local MFS agents to load accounts of relatives of the expatriate Bangladeshis for a cut.

Due to the illicit fund transfer from abroad, remittance inflow dropped 14.47 percent year-on-year to $12.77 billion in fiscal 2016-17.

bKash, the leading MFS provider, was being misused to channel money home, found an investigation by the BB.

“It is true that the name of bKash is being misused for illegal remittance transfer,” Qadir said, adding that the company is partnering with different banks to legitimise remittance transfer through the MFS channel.

bKash works as a distribution channel and the banks maintain the central account to handle the foreign currency, he said, adding that such an initiative would reduce the unaccounted inflow.

Remittance distribution through the MFS channel increased 6 times to Tk 30 crore in Septem-ber this year from a year earlier, according to data from the BB.

The MFS has also provided a new avenue for criminals to channel ransom money, the study found.

Some 18 percent of the survey respondents said hijackers blackmailed them to send money to their MFS accounts.

The study also found that the MFS is making significant breakthroughs in the domain of traditional banking and other types of banking services. Some 53 percent of respondents said they used MFSs.

Comments