Asma Begum, a home-maker and mother of two children, resides in Mohammadpur in the capital. Because her husband works full-time, she is responsible for the family's well-being and must act as the decision-maker on everything starting from grocery shopping to luxury buying to maintain the households.
“As a middle-class family, we always have to carefully manage our limited resources and income,” she said.
As the coronavirus was spreading across the country, Asma decided not to keep any domestic help because of the possible spread of the infection. She realized she needed to get a washing machine at that point.
“I did not hesitate to buy a washing machine when I learned that I could get a 10 per cent discount if make the payment with my Nagad wallet,” she added to express her joy.
When consumers in Bangladesh, like Asma, find out that they may save money on purchasing the products or services they want, they become more interested in shopping. They are also increasingly turning to digital payment methods, as it is simpler and safer than dealing with cash, and additionally comes with attractive offers.
To match the evolving purchasing habits of consumers, businesses such as banks, fintech, e-commerce, and others are continuously launching rewarding campaigns that benefit both the business and the customers. These efforts not only benefit businesses by raising sales, also boost digital payment throughout the country.
According to the latest data, Bangladesh achieved an 85 per cent growth as of August 2021 by progressively transitioning from the traditional banking system to digital financial transactions. According to central bank figures, digital transactions increased by 59 per cent to BDT 108.25 billion in August 2021.
The number of transactions on the Bangladesh Electronic Funds Transfer Network (BEFTN) increased by 23 per cent. According to central bank figures, card transactions (both domestic and foreign) climbed by 53.5 per cent in terms of number and 36.4 per cent in terms of volume.
While card usage is still low, especially in a developing country like Bangladesh, Mobile Financial Service or MFS has taken the lead riding on the opportunity to introduce all-new innovations, low-cost transactional facilities, and exciting offers like discounts and cashback, all of which have helped to significantly boost digital payments over the years.
MFS has more than 100 million users in Bangladesh. This is an important step forward in the country's efforts to promote financial inclusion for all.
The Covid- 19 Pandemic has pushed consumers to redefine their needs, also helped them realize the importance of contactless aspects of transactions over paper currency. MFS operators are also bringing exciting offers and campaigns partnering with various merchants for users to make their digital payment experiences faster and safer, and to serve all of their payment needs. This is significantly boosting digital transactions in ways like never seen before.
For example, when the country was combating the delta variant of the coronavirus earlier in April 2021, Marchant payments via mobile wallets saw a significant surge during that time. Consumers transacted BDT 27.59 billion via mobile wallet only at numerous Marchant outlets. The transaction volume stood at BDT 29.50 billion as of October 2021. This demonstrates how consumers are opting for digital transactions and depending on exciting campaigns to meet their day-to-day needs.
MFS operators now plan to continue delivering these unique opportunities to consumers by launching periodic and year-round promotions. By assessing the requirements and expectations of consumers, the operators are working relentlessly to onboard more merchants. In this way, MFS operators not only encourage customers to pay digitally, but also give them the option to save more money on purchasing their desired goods.
Nagad, for instance, a mobile finance service of the Bangladesh postal department, currently has over 25,000 partner retailers and merchants. Throughout the year, the operator promotes digital payments at partner Marchant locations across the country, where consumers are given access to multiple exclusive offers.
Nagad recently ran a campaign, offering customers to avail up to 16 per cent discount and cashback over 126 brands by making the payment with Nagad wallet. Nagad customers were able to enjoy the special discount and cashback offer superstores, restaurants, airlines, fashion products, e-commerce, electronics, footwear, furniture, hotel and resorts, internet and satellite TV, accessories, tour and travels are some of the categories. The operator thoroughly assessed every day needs and expectations of its consumer and set the array of offers accordingly.
Nagad brings numerous such campaigns throughout the year that is tremendously boosting digital payment in the country by providing customers with the opportunity to spend less money and shop more.
“Supporting Bangladesh’s goal of a cashless society by promoting digital payments is our key agenda as an MFS. We want to continue offering a variety of exclusive discounts and cashback at our partner outlets across the country,” said Tanvir a Mishuk, managing director of Nagad, a disruptive MFS carrier in the country.
"We will launch more such campaigns so that none of our consumers remains deprived of the opportunity to purchase their desired products, and we believe that this will eventually boost the adoption of digital payments in Bangladesh," Tanvir added.
It is worth noting that in 2021, Nagad users saved more than BDT 2 billion through the campaigns and discounts at Nagad's various merchant stores and services. The MFS operator currently has about 58 million registered users.
In addition, Nagad is offering users to shop from more than 700 e-commerce platforms through Nagad wallet, and almost all of them offer various attractive facilities, including cash-back. Transactions through Nagad are also popular on numerous Facebook-based e-commerce sites, facilitating online shopping.
Talking to The Financial Express, CPD's director (research) Dr Khandker Golam Moazzem said the MFS has been witnessing an increasing trend in limited areas.
Some MFS operators are doing better in terms of financial inclusion but many still lack behind, he argued.
The only ordinary transaction is now available in the service except lending, a bigger deposit and so on, Dr Moazzem observed.
He also put emphasis on developing skills among the people, digital equality and equal access to services.
Terming that the service should not be solely city-centric, he said it is enormously required to involve the low-income group and women in the services to enhance financial inclusion.
Given that, Bangladeshi consumers still have sensitivities due to their concern on price, in order to preserve and gain market shares, digital payment providers are now focusing more on price campaigns around special occasions – with consumers also wanting price drops to purchase products that they would not normally purchase with the actual value.
While offering discounts is a common method for attracting new clients, campaigns that Nagad brings, foster pricing competition within the sector, allowing customers to benefit from a variety of offers and profits. Customers gain from healthy competition because they have the opportunity to choose, and the market remains balanced.