• Wednesday, Dec 08, 2021
  • Last Update : 01:17 pm

MFS transactions decline 6% in August despite more users

  • Published at 08:28 pm October 19th, 2021

MFS transactions also saw a 50% year-on-year growth — in August last year, the transaction value was Tk41,403 crore

Despite a 1.6% growth of subscribers and active users in the mobile financial service (MFS) industry, the number of transactions in the sector dropped by more than 6% in August.

MFS accounts reached 104.4 million in August, however the transaction value dropped from Tk66,387 crore in July to Tk62,230 crore in August, according to data by the Bangladesh Bank.

But this figure excludes data from MFS provider Nagad.

Also Read - TAP is tapping into Bangladeshi MFS industry

According to industry insiders, the decline in transactions was caused by customers pivoting back to direct services from banks after a drop in Covid-19 deaths and the caseload. 

Special facilities such as no limits on transactions and reducing transaction fees used to popularize mobile banking services among customers during the lockdown period had boosted the transactions which have now been revoked, causing the decline, a central bank official said.

However, according to Shamsuddin Haider, head of Corporate Communications and Public Relations at bKash, the number of transactions usually declines following festive months as the figure gets inflated when people send money to relatives.

“Transactions were slightly lower in August in comparison to July due to the increased transactions surrounding the Eid festival in July,” the bKash official said.

But MFS transactions also saw a 50% year-on-year growth — in August last year, the transaction value was Tk41,403 crore. 

"The use of MFS has increased year-on-year as there is an opportunity for almost all types of financial transactions to be completed while staying at home during the pandemic,” Haider said. 

“At the same time, receiving financial aid and incentives from the government and private institutions, paying all types of utility bills, mobile recharge, adding money to bKash from bank accounts or cards, receiving remittance from abroad, paying education fees, buying tickets, and so on, have boosted the volume of transactions, which is reflected in the total transaction data,” he added.

Also Read - Nagad’s interim licence gets another extension from Bangladesh Bank

In addition, the diversity of services has played a significant role in increasing the use of MFS, he further said.

With the addition of 18 new banks in the last one year, bKash customers can add money from 29 banks now, Haider also said.

As per central bank data, the amount of MFS "cash-in" was Tk18,669 crore in August, while "cash-out" was Tk14,992 crore, with 1.16 million agents involved in the MFS services.

Regular transactions occurred through 30-40 million accounts, the data shows.

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