Digital payment takes a giant leap forward

Mohammad Polash, owner of a food cart at Mohammadpur Town Hall Market, opened a micro-merchant account with bKash a month ago.

The largest mobile financial services provider in Bangladesh has linked a quick response (QR) code to Polash’s micro-merchant, or personal retail account (PRA).

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He sells hamburgers with an average value of Tk 10,000 per day. On the amount, customers pay between Tk 1,000 and Tk 2,000 using QR code, a type of barcode that stores information and can be easily read by smartphones.

Payment through the digital platform is increasing and the majority of customers are students.

The benefit of the ongoing technological transformation in Bangladesh does not stop there, as Polash can also source food ingredients from suppliers digitally.

Many street vendors and small grocery store owners like him now prefer digital transactions, which were only available in major city malls until recently. Now it can be seen everywhere, from urban markets to rural markets.

A micro business is allowed to accept a maximum payment of Tk 30,000 per day and Tk 5 lakh per month.

Users of mobile financial services, digital payment services, and bank debit and credit card holders can all make digital payments using phones.

The move is expected to drastically reduce the use of cash and pave the way for a cashless society in cash-dependent Bangladesh.

PRA holders of bKash received payouts worth Tk 15.37 crore in November. They used Tk 12.36 lakh to purchase goods with the same payment method.


Ali Ahmmed, Chief Commercial Officer of bKash, says the MFS provider is working to onboard thousands of merchants and drive customers to adopt the new service.

It has 26,217 micro-traders in November.

Mutual Trust Bank (MTB) opened 5,000 micro-trader accounts to serve marginalized businesses.

The bank plans to open a lakh PRA and bring businesses from three major kitchen markets in the capital into its program, said Syed Mahbubur Rahman, managing director of the bank.

Account holders of any bank with Visa debit card can now make payments via the QR code used by MTB.

Bank Asia, one of the pioneers in the field, has achieved tremendous success by opening more than 51,000 PRAs.

“We focused on small businesses in rural areas,” said Md Arfan Ali, the bank’s managing director. The bank has set a target of opening 2.5 lakh micro-merchant accounts in rural areas within five years.

Dutch-Bangla Bank Ltd, which also owns the MFS Rocket brand, has taken initiatives to make its digital program dynamic. It opened 1,350 accounts in December, chief executive Abul Kashem Md Shirin said.

Trust Axiata Pay, an MFS provider jointly established by Trust Bank and Malaysia’s Axiata Digital Services, has started opening PRAs.

It launched a pilot program by enlisting 300 rickshaw pullers on January 8, which will continue this month.

Dewan Nazmul Hasan, acting managing director of provider MFS, said he started the project with the vision of digital financial inclusion for unbanked micro-merchants.


Street vendors can now obtain loans from banks by presenting their PRA transaction profile.

A micro-trader is allowed to take out a maximum of Tk 5 lakh in loans under a central bank refinancing scheme.

Businesses generally need to present business licenses and tax certificates to open a merchant account and checking account. But the central bank allowed customers to open PRAs without submitting a business license or tax certificate.

Banks check a micro-merchant’s transaction profile to assess their creditworthiness and set a limit. No current account is required to manage the loans.

However, the central bank has imposed a cap on financial transactions through PRAs. The monthly outstanding balance cannot exceed Tk 10 lakh.

Customers can open accounts by completing a simplified electronic know-your-customer (e-KYC) form, using national identity cards. These accounts can be opened in five minutes.

Mutual Trust Bank has already started providing loans to micro-traders, said Khalid Hossain, head of digital banking.

Forty-four small businesses have so far taken out loans and the number will rise to 10,000 by this year, he said.

Bank Asia’s micro-traders disbursed about Tka 500 crore in government subsidies among beneficiaries last year.

“It has helped people to withdraw funds at their doorstep,” said Arfan Ali.

On top of that, customers bought products worth Tk 10 crore from the micro traders last year. They also topped up 3.38 crore of Tk to top up cell phones, he said.

Bangladesh has made impressive progress in expanding mobile financial services in recent years.

There are 10.97 million MFS users in November, according to central bank data. Around 67,966 crore of Tk was funneled through the accounts during the month. Payments from traders amounted to Tk 3,050 crore.

Transactions through micro-trader accounts are expected to further boom when the “Bangla QR” code becomes widely used.

Micro-merchant account holders from banks and MFS providers now use their respective QR code, which is not interoperable.

The uniform digital payment method – Bangla QR – will help customers to pay bills and purchase goods and services through any mobile banking apps, MFS providers or payment service providers, an official said. BB.

“We believe that the reach of MFS goes far beyond cash-in or cash-out. We want to reach every corner of Bangladesh where our customers can make every small transaction through Tap,” said Dewan Nazmul Hasan.

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