Bangladesh sees unprecedented level of credit card transactions in March as economy reopens

Total transactions through credit cards went up by 19.15% in a month and 40.94% YoY to Tk2,513 crore

Bangladesh witnessed an unprecedented level of credit card transactions in March this year as the economy reopened following the advent of the pandemic.

The total amount of credit card transactions stood at Tk2,513 crore in March this year, up by 19.15% from a month earlier and 40.94% year-on-year, as per the central bank’s latest data. 

In January 2022, transactions through debit, credit, and prepaid cards increased to Tk27,072.5 crore from Tk20,524.3 crore in December 2020. 

Debit card transactions increased to Tk24,701 crore in January 2022 from Tk18,795.6 crore in December 2020. 

Credit card transactions stood at Tk2,138.4 crore in January 2022 from Tk1,560.9 crore 13 months ago. 

“Credit card transactions reached a record high in March due to an increase in sales during the Eid-ul-Fitr and the lifting of travel restrictions after the Covid-19 pandemic,” Syed Mohammad Kamal, the country manager of Mastercard Bangladesh told Dhaka Tribune.

According to Kamal, the pandemic made people realize the importance of card transactions as opposed to managing currency notes and as people continue to run their businesses without interruptions and travel locally and abroad, credit card spending is expected to keep rising and thus shape a digital economy. 

In March, the number of credit cards stood at 37,98,207 in the country, up from 32,49,764 the month before, according to central bank data.

On top of that, 35 out of 60 banks in the country operate in the credit card segment.

With Pohela Boishakh, Ramadan, and Eid-ul-Fitr being celebrated in almost the same month, after two years of lockdowns, many banks offered special discounts, cashback and buy-one-get-one-free offers on shopping, travelling and restaurants.

Visa and Mastercard holders enjoyed various discounts at various fashion and jewellery stores throughout the entire month of Ramadan. 

Additionally, card transactions on e-commerce platforms have been recovering slowly since December 2021, which saw a sharp decline in July of the same year, after recording the highest ever in June. 

E-Commerce Association of Bangladesh (e-CAB) vice-president Shahabuddin told Dhaka Tribune: “There have been several centralized efforts to bring back much more sense of control to the consumers of the sector who are facing huge trust issues in ordering online and bring back discipline to the sector that has been plagued by rogue e-commerce platforms through accountability. Trust in the sector has slowly recovered.”

E-CAB currently has 1,693 active e-commerce companies as members and has reported a 40% increase in online sales since the start of Ramadan on April 3, with businesses in the sector receiving an average of 50,000-60,000 orders per day.

According to the top brass of Mastercard Bangladesh, the government needs to incentivize digital payment in the upcoming budget.

“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,” he added.