Mastering the art of financial inclusion through digitization

The global payments and technology company MasterCard opened its local representative office in Bangladesh in 2013, but started offering its services more than two decades back in 1997. In an interview with its Country Manager Syed Mohammad Kamal, Dhaka Tribune’s Zisan Bin Liaquat had the opportunity to learn how the global financial giant mastered the art of incubating financial inclusion over the last few decades

What financial inclusion projects have Mastercard worked on in Bangladesh, and what impacts did those have?

Mastercard, from its inception in Bangladesh, has been working to meet the needs of the financially underserved, offering convenient payment services by working along with key local financial institutions in Bangladesh to implement world-class payment solutions, as well as to help develop the local industry.

We brought in contactless payments while pioneering BanglaQR-based payment in Bangladesh with the central bank introducing guidelines for it. We also brought in interoperability between mobile financial services, and banks or cards, by bringing an “add money facility” for the very first time as well.

We also introduced pre-paid services for the freelancing community who were enabled to have access to payment services spread over the globe. 

As an innovative company, we always try to bring the right solution after realizing the pain point of the community or the people on whom we are trying to bring a solution through rigorous analysis. That means, we diversified payment solutions introduced into this market and addressed the need of the community addressing the need of segments.

In terms of bringing in financial inclusion, we have also introduced cross-border mobile money transfer with a strong footing in the remittance segment. 

One of the biggest impacts that Mastercard has had in the Bangladeshi financial industry is the introduction of cross-border money transfer to mobile phones. Could you guide us through the process of launching that service?

Through HomeSend, we tapped into Bangladesh's fast-growing market for sending remittances through the official channel that got an unexpected bump earlier in the pandemic, partly collapsing the hundi system.

With our Australian mobile software developer eServGlobal and Belgian telecommunications provider BICS launched in 2014, migrant workers have another option to send money through the official channel. 

Remitters from 138 countries can transfer remittances directly to account holders of Dutch-Bangla Bank and 55 million bKash accounts, which partnered with Bank Asia for the service. 

The partnership will allow customers to receive remittances literally at their fingertips, and under the collaboration, we will further contribute to the remittance flow of our economy, empowering rural households in receiving the remittance in the most convenient ways.

Thanks to HomeSend, remittance recipients can do away with the middlemen, who charge a sizable amount to deliver the amount sent in from abroad and also tend to be unreliable. 

Meanwhile, flexibility and convenience to remitters will make Bangladesh’s financial system accessible to more people, expanding financial inclusion to even the remotest parts of the country.

To what extent did Mastercard contribute in bringing in remittance, if you could give us an approximate percentile?

We just started out. So our volumes are still relatively low. However, in the years to come, you can expect us to take the lead in that sector as well, just like we have done on the digital payment front.

Do you think mobile financial service (MFS) is a competitor for the card business? Or is it more of a complement for the card industry? 

No! We, as a network, strongly believe in collaboration. See, ever since we started working with MFS through bKash add-money, we believed that the MFS has their strength as we have ours. 

MFS has more end-user reach which we capitalize on to bring convenience for the consumers, whereas, bKash uses our strong global footprint to incubate a rich network. 

It has always been more collaboration than competition and that is the future, and from the very beginning, we have been partnering up with local players to develop the market. 

In the aftermath of the e-commerce scandals, do you think digital payments will regress from being a popular method of payment and be replaced by cash on delivery?

There is no doubt that the recent e-commerce conundrum had an impact on digital transactions. If you look at the data of Bangladesh Bank, following the scandals, digital transactions have fallen, which grew immensely, prior to the advent of the pandemic. 

Consumers now want to pay by cash more, which directly impacts us, payment service providers. If this goes on, the progress we made in achieving a cashless society in Digital Bangladesh will all go back to zero.

However, if you look at companies who came into existence even before these rouge platforms and even during the pandemic, many have done well amid all this, especially on the grocery side, gadgets, and luxury segment. 

We need to bring back consumer trust more by exposing more good stories than negative narratives. 

In that regard, the Mastercard Excellence Award this year recognized partners across categories for their contribution to innovation and success in driving business growth and contributing towards driving financial inclusion, to spread the positive part of the aspect, which needs to be done more.

Cashless transactions have seen a boom amid Covid-19, but it is still at a very early stage. What more changes does the fintech industry need, in your opinion?

Well, the government has been doing its part massively to bring in developments across all sectors. For example, the remittance story. An incentive policy of 2% has boosted our remittance by folds. The government needs to incentivize digital payment as well. 

We have already made several proposals through different associations and trade bodies to the government in this regard. What we propose is a 5% incentive like that for digital payment which would be segmented into 3% for the consumer and 2% for the merchant, at least for the next few years. 

BASIS, ICT, Commerce, and Financial wings of the government are being engaged in this regard. This will be totally a win-win situation for both consumers and merchants. 

Only this will help incubate more growth among this massive storm in the e-com sector brought in by a few.

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