Experts have suggested mobile financial service (MFS) providers to cut cash-out charge down to a single-digit as high transaction cost is keeping marginal people as well as more micro and small enterprises (MSEs) away from availing this services.
They also urged the regulator –Bangladesh Bank (BB) to intervene in MFS charge by imposing ceiling to materialize the government's ongoing digital Bangladesh campaign.
Talking to BSS, former BB deputy governor Khondkar Ibrahim Khaled said in this present circumstance BB has no alternative of intervention for reducing the cash-out charge as the MFS operator would not do it willingly.
"MFS operators have been doing business as per their wish as BB is yet to impose any restriction," he said.
Besides, e-Commerce Association of Bangladesh (e-CAB) director Ashish Chakraborty said cash-out charge in Bangladesh as much as high compared to other countries in the world and it should be single-digit to boost country's financial inclusion and digitalization process.
At this moment, cash-out charge is Taka 18.50 for per Taka 1,000 although the agents of MFS providers have been charging Taka 20.
Meanwhile, Nagad, a MFS arm of Bangladesh Post office (BPO), has reduced cash-out charge to Taka 9.99 for every Tk1,000 cash-out to make transaction process of customers easier and comfortable.
To get this minimum rate, a customer has to use the Nagad app and the minimum cash-out amount should be Taka 2,100. On top of the cash-out charge, the customer has to pay a supplementary duty at the rate of 15 percent fixed by the government.
However, if someone goes for cash-out through mobile operators USSD technology without using the app, the rate will be Taka 12.99 for Taka 1,000 and here 15 percent VAT will be added.
Welcoming Nagad's move of trimming down cash-out charge, Ashish Chakraborty said it might help their customers, but he feared how long Nagad can continue this offer defying the pressure of other MFS operators.
Ashish said other carriers should follow Nagad's move as low cash-out charge might boost transaction tremendously and expand industry size by many folds.
Although Nagad has slashed charge categorically, other carriers are still reluctant to do it rather they are in persuasion against this move of Nagad which would give benefit to the customers.
To implement the new cash-out charge, Nagad has slashed their income from the previous portion. However, other operators in the market are still charging cash-outs as before.
Nagad said even after bringing down the cash-out charge to single digit, its income from this segment is still prevailing.
They said if Taka 1,000 was cash-out using app at previous rate, its revenue would have been Taka 2.74, which has now been brought down to less than Taka 0.02.
In case of full calculation of cash-out, the cost of SMS is Taka 0.064 as before while this cost is same like all MSF operators.
In the new charge structure revenue portion for distributors also reduced, however income of the agents remains same as before. Moreover, their income has already increased more than before due to the increase in transactions. In the new charge structure of Nagad, agents are getting Taka 4.10 for cash-out of Taka 1,000 as before.
Nagad Managing Director Tanvir A Mishuk told BSS that they have been providing customer-friendly service from the beginning with lower charge than all other operators.
"Single-digit cash out charge would expedite financial inclusion in the country," he said mentioning that over the past decade, several MFS operators have been cutting customer pockets imposing high charges.
Industry people said few MFS operators are reluctant to cut costs rather announcing offers imposing conditions to cheat customers categorically. They said the carriers are giving cash-back to only five customers for bill payment but running campaign which apparently shows they are giving 100 percent cash-back facility to everyone.