Enhancing mobile money transfer

Md. Mazadul Hoque | Published: February 09, 2018 23:57:03

Once upon a time, not so long ago, the people had always been watchful waiting for delivery of money through the postmaster or Runner. This had been in vogue for decades. Then this had been the lone money transfer mode. Currently, the people aspiring to get and send money, for ones living at home or abroad, are showing more enthusiasm about making very fast transaction that takes not more than five minutes.

A revolutionary change has taken place that helps the people access banking from any place, any time round the clock. Mobile banking is a mode of money transfer from one place to another through Subscription Identification Module (SIM) of any mobile operator, a device, installed on a mobile set of a person.

There is no denying that now-a-days money transfer between two through mobile devices has proved the best way in recent years as the people in hard-to-reach areas are able to make transactions within a few minutes.

No doubt, the revolution appeared a blessing against the backdrop of materialising financial inclusion in the country which had been committed by the ruling government earlier. Mobile banking is a newly-initiated fast money transfer mode.

According to latest statistics of Bangladesh Bank, during the April-June period of 2017 Tk 812.019 billion (81,201.9 crore) was transferred by 53,702,690 subscribers. The figure was Tk 658.39 billion (65839.8 crore) transferred by 41,047,119 subscribers in the October-December quarter, 2016 through the mobile banking channel. In the month of August, 2017 an amount of Tk 321.83 billion was transferred by 56,995,218 subscribers.

In Southeast Asia, mobile phone penetration is relatively high ranging from 140 per cent in Malaysia to 127 per cent in Thailand and 114.2 per cent in Indonesia.

According to a new Forrester Research report, a USA-based research firm, mobile banking will reach 108 million users in the U.S. by 2017. That's about 46 per cent of all U.S. bank account holders. Today, according to Forrester's latest survey, just about 13 per cent of U.S. and 9.0 per cent of European mobile phone owners regularly use their banks' mobile banking tools.

At this time, according to the report, most users are just using mobile banking to check their balances (45 per cent), transaction histories (61 per cent) and to transfer money between their own accounts (31 per cent). In the U.S., 65 per cent of mobile bankers use their banks' mobile sites and 45 per cent use apps. In Europe, SMS alerts still remain the most common type of mobile banking.

It is very clear that the main objective of setting up a bank branch at any place is to generate profit through investment in potential business sectors minimising its cost. So, the plan to set up bank branches in union or village areas across the country is not obviously a wise decision. As a result, launch of mobile banking services is a giant step towards enhancing financial inclusion. Every new model has its risk and privileges. So, concerned financiers should scale up the compliance.

The regulator Bangladesh Bank is seen to have left no stone unturned to enhance the financial inclusion bringing the unbanked population under the net of banking for half a decade.  Top functionaries of Bangladesh Bank are in a race to push the banks to reach out to the unbanked population with easy-to-access products. The newly-initiated mobile banking is the big platform for reaching out to the unbanked.

As still  being developing countries one in the worldpurchasing power capacity of every citizen is thought to be poor than that of developed countries, the prices of mobile phones which are put on display to sell out ought to be made affordable cost to all. Without having mobile device to the hands of the marginal people, the dream of financial inclusion would not see through mobile banking.

As Bangladesh Telecommunication Regulatory Commission (BTRC) on its website revealed that the phone subscriptions reached 143.106 million as of November last. Mobile operators can also play the role in expanding the subscriber base by offering to sell SIM at a cheaper rate to the subscribers which would lead to acceleration of transactions through mobile banking.

Less than 70 per cent people live in the country's rural areas where financial inclusion through any banking channel is a big opportunity.

As at least one member of every family uses mobile phone bearing mobile banking account, access to financial world through such user-friendly mode has been possible for people of far-flung areas. The underprivileged people like rickshaw pullers, wage earners, seasonal traders  are seen to send their hard-earned money to their near and dear ones by using mobile sets they own.

The Bangladesh Post Office (BPO), a state-owned service provider delivering parcel, letters, money, is still there. The BPO has launched another channel named Electronic Money Transfer Service (EMTS) commonly known as Mobile Money Order Service (MMOS) but traditional money order is still in practice. This mobile money order service requires both the senders and receivers to go to their respective post offices. The BPO has not been able to reach out to the urban people with its mobile money transfer, let alone rural people, due to lack of inadequate branding, though this service is being ensured from 2,750 post offices ( according to BPO) located only in urban areas. So, advertisement to be telecasted is a must to reach out to the users.

Under the 2030 Agenda for Sustainable Development, the UN is calling for reduction of the transaction cost of remittance. With the help of the state it can play a role in minimising the transaction cost. So, the BPO might stand by the expatriates by expanding mobile money transfer facilities abroad. 

If the government takes a decision to promote electronic money transfer through cell phones globally, the one million job holders living overseas might use this channel to send their hard-earned money to the country. It can expand its offices mainly in Middle Eastern countries where most of the expatriates live.

For expansion of money transfer facilities by banks, the Know Your Customer (KYC) form can be introduced at the agent outlets as early as possible with incorporated need-based details to avert terror financing. A number of agents have reportedly been caught red-handed by security personnel while attempting at money laundering at the agent outlets. So, the Bangladesh Financial Intelligence Unit (BFIU) of the Bangladesh Bank has to keep its eye always open and may arrange surprise visits to different agent outlets, if possible.

Moreover, at the agent outlets, the agents might apply Customer Due Diligence (CDD) during any transaction to combat terror financing. It is needless to say that the money laundering issue has been a priority in the operation of mobile banking. When any kind of deal with foreign banks for the export-import purpose takes place, how much it has complied with the terms against money laundering should be scrutinised.

Necessary precautionary measures must be documented in the guideline prepared by the central bank against money laundering. The banks and the BPO can join hands to introduce mobile banking operation on a large scale without making any delay making Bangladesh a model before the world to follow.

The writer is executive officer of Social Islamic Bank Ltd, Bangladesh


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