Mobile banking transactions maintained a momentous growth in 2018, albeit at a much lower rate than the previous years.
The latest data of the Bangladesh Bank (BB) shows that transactions worth around Tk 3.79 trillion took place through mobile financial service (MFS) platforms last year.
The figure is around 20.70 percent higher than MFS transactions worth Tk 3.14 trillion that took place in the country in 2017.
This surge in MFS transactions last year is, however, significantly lower than the previous two years, when the growth rate was more than 34 percent.
When asked about the reason behind the slowdown, industry insiders analysed the situation as an initial sign of market saturation.
"Obviously, some saturation is bound to happen, as MFS becomes accessible to more and more people, and there is lesser market to tap in," said Kamal Quadir, CEO of bKash, the country's largest MFS provider.
He also noted that BB's provision to restrict opening of more than one MFS account with a single national identity (NID) card has also contributed to this decreased growth.
"There might be some saturation when it comes to peer-to-peer (P2P) transactions," said Shahadat Khan, CEO of SureCash, another major MFS provider.
"But obviously there are areas like merchant payments where there are scopes for further growth for MFS," he added.
Meanwhile, when it comes to the number of transactions, BB data shows that more than 2.27 billion MFS transactions took place in the country in 2018.
The figure is about 21 percent higher than around 1.87 billion mobile-based transactions that occurred in 2017.
Among various types of MFS transactions, cash-in and cash-out were the most prominent ones.
Besides, it is also visible that inward remittance through MFS platforms has also seen a substantial increase in the recent months.
Inward remittance amounting to around Tk 40 million came to Bangladesh in December 2017, whereas the figure gradually soared to more than Tk 780 million by November 2018.
When pointed at this particular trend, the industry insiders attributed it to the increased use of MFS as a legal channel for sending remittance from abroad.
This trend comes as a welcome news for the MFS providers, as illegal sending of remittance through MFS channel was a serious concern for BB in last fiscal year (FY).
The country saw a sharp fall in remittance inflow in FY 2016-17, which decreased to 14.47 percent year-on-year to US$ 12.77 billion. The trend was partly blamed on the growing use of MFS channel for sending remittance.
The sharp fall later prompted the central bank to find out ways to legalise the way remittance comes to the country through MFS channel.
In the last one year, the MFS providers were asked to tie up with banks to prevent misuse of the money transfer method.
"Accordingly, we have established partnerships with four banks, including BRAC Bank, Bank Asia, Mutual Trust Bank and City Bank," said the bKash CEO.
"We have also registered our logo in nine countries where there are higher incidences of such illegal activities, so that no one is able to use our brand name for sending illegal remittance," he added.
Thousands of MFS agent accounts were also suspended over the last one and half year, while several MFS agents were held for their alleged involvement in digital 'hundi'.
MFS operators opined that such regulatory actions have helped to curb use of MFS as a channel for sending illegal remittance.
Meanwhile, Bangladesh ended the year 2018 with a total of 37.3 million active MFS accounts, up from 21 million accounts it had a year ago.
The number of registered clients increased from 58.8 million to 67.5 million, while the total number of MFS agents rose from around 786,000 to more than 886,000.
On an average, daily transactions worth more than Tk 10.34 billion took place in the country though MFS channel in 2018.
When it comes to the number of transactions, the daily average stood at around 6.2 million.
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