Mobile Financial Service (MFS) interoperability, which allows for direct transactions between the clients of two separate MFS companies, as well as two separate banks, is likely to be inaugurated next week.
According to sources at the central bank, if the trial run of MFS interoperability is successfully completed, the system will likely be inaugurated next Sunday (November 13).
According to the central banker, bKash, Rocket, mCash and another MFS company along with 10 banks will initially have access to the facility for their clients.
The central bank inaugurated interoperability among the MFS platforms earlier in October 2020, but was discontinued just hours after its launch, and remained unrestored so far.
The ICT Ministry, through a2i, had developed several software including an interoperable transaction platform “Binimoy” that was supposed to go live in March of this year. Butwas delayed as well.
ICT State Minister Zunaid Ahmed Palak had previously said that bKash and 15 other banks have already signed up for the platform Binimoy, which will eventually automate credit rating and credit scoring in the future.
According to PRI Research Director MA Razzaque, financial transactions in the country would be far simpler, competitive and innovative once financial interoperability is restored or other necessary frameworks are implemented.
Experts believe that financial interoperability among the platforms is crucial in maximizing the benefits of financial inclusion that came through the MFS sector a decade ago in 2011, providing access to low-cost digital financial services to the informal sector demographic, especially in rural areas.
They said financial interoperability will infuse dynamism in the economy and growth will be further strengthened. It is necessary to adapt to the evolving changes and initiative needs to be taken so that people can make transactions in shops by scanning QR codes.
Over the last several months, experts have heavily underscored the importance of financial interoperability among the platforms, which would be crucial in maximizing the benefits of financial inclusion.
Although digital financial services have made a positive impact on poverty alleviation and on personal savings, transactions and exchanges of information that took place so far were not interoperable. It was rather an interconnection.
The government will have to develop the necessary infrastructures in this regard, and make investments like its neighbouring country India, which invested huge amounts in introducing such a system, experts said.
To that extent, the country's Interoperable Digital Transaction Platform (IDTP) or “Binimoy” has been developed to work like the United Payments Interface (UPI) model of India.
“Binimoy” is not a separate app and will be integrated into the apps of the banks and MFS companies as a service.
However, customers will have to register to use the facility.
For now, customers will not have to pay any fee for money transfers. But a fee will be set by the central bank later.
Experts and industry insiders believe that the financial sector will see a huge rise in digital transactions if the system is implemented.
Earlier this year, Tellimer reported Bangladesh as one of the biggest markets for mobile money globally, with over 110 million users transacting $100 billion over the past year, which was later published on Nasdaq.
More than 110 million individuals in Bangladesh are currently using such services. Of which, 45 million of them are active users and it has become one of the most potent markets, as per the report.
The latest industry data, when compared to 2015, showed that the number of registered mobile money agents had doubled over the period to 1.2 million, while the value of transactions increased six-fold.
The market trend as per industry statistics showed that the acceleration in transactions and transaction value grew from 2020 and onwards, accelerating during and following the pandemic.
The pandemic has considerably increased the usage of bank and MFS accounts and according to industry insiders, the volume of such transactions has been increasing rapidly over the years due to the growing number of customers who rely on MFS for everything from fund transfers to bill payments.
On top of that, the country's young population and the shift towards a digital payments culture provided the right time to add financial products such as loans, insurance and investment and non-financial services such as e-commerce, deliveries and so on to any market player's portfolio.
Additionally, bank account penetration stands at just 53% in Bangladesh, and less than one-third of bank customers have been able to take a bank loan.
Meanwhile, credit card ownership stands at just 1%, and even debit card ownership is only 5%.
Global researchers believe that the data signals a structural shift in the industry away from bilateral peer-to-peer transactions and toward a broader range of use cases.
