Mobile money transactions grew by 30% in 2020

Mobile money transactions have been gaining popularity in the country amid the contagion, with a 30% growth in 2020 to Tk5,60,000 crore compared to the previous year.

The nationwide shutdown and the practice of social distancing have increased the demand for digital money transfer, according to industry people.

"I think a 30% increase in mobile payments in a calendar year is very significant and a milestone for the overall digitalisation process, especially in the financial sector," said Tanvir A Mishuk, managing director of Nagad, the digital financial service arm of the Bangladesh Post Office.

Transactions of an additional Tk1,27,173 crore in 2020 from the previous year are a boost to the confidence that "we have been able to earn the trust of the masses", he said.

A few years ago, people used the payment gateway only to send money from one place to another, but now it is one of the main payment methods for shopping – both online and offline.

Moreover, almost all utility bills are paid through mobile financial services (MFS). The digital payment method has also become very popular in the disbursement of salaries and tuition fees.

The demand for mobile banking jumped in the middle of last year when the virus curve was climbing to its peak, resulting in a significant rise in the number of service recipients and transactions.

In July 2020, the number of active clients rose to 4.27 crore. That same month the total mobile money transactions went up to Tk63,000 crore, which was higher than at any other time of the year.

As money transfer by the government to the poor slowed down, the number of active clients came down to 3.16 crore in November, but again rose to 3.23 crore the next month. The number of registered MFS subscribers was, however, close to 10 crore. 

The number of transactions and other services through mobile banking was also higher in December last year than in the previous month, according to the latest central bank report on mobile banking published on Wednesday.  

Tanvir said new services introduced by Nagad had contributed to the rise in the number of clients in December.  Besides, people tend to engage in more money transactions at the end of a year, he added.  

There was also a 15.5% jump in remittance inflow in December through mobile banking compared to November.