News Column

Branchless banking transactions grow by 16pc to Rs224b

February 18, 2014


Developments in branchless banking across the country have been so tremendous during the past 5 years that there is no doubt today about the potential of mobile phone banking to be a game-changer in banking and m-commerce.

According to SBP report the third quarter of the calendar year 2013 came to a close with almost 52 million branchless banking transactions, which led total value of transactions to reach Rs 224 billion, thus reflecting 16pc growth in numbers and a notable 29pc growth in value during the quarter.

While the growth and uptake of the MFS services are rapid, the focus of the consumer is OTC services. According to Aniqa Afzal Sandhu the Head of MFS at Mobilink, Mobile Wallets are a challenge for the entire industry and there is a need to increase focus in that area.

"The reason behind the nominal uptake of Mobile Wallet services is the lack of trust of consumer in handling money from their mobile phones.

Mobicash has a clear vision of increasing awareness and ensuring transparency for the consumer in the Mobile Wallet product to increase its uptake." Aniqa said that the industry has seen a 2pc growth in M-wallet uptake in 3Q13 over the previous quarter taking M-wallet users in Pakistan to 3m. In terms of value of transactions, 52pc share was attributed to OTC transactions, followed by 42pc share of value transacted by agents for liquidity management.

Mobicash, with 30,000 retailers is the fastest growing and possesses the 2nd largest footprint of MFS retailers in the country. This growth has come about in just over a year of launch of Mobicash. About the challenges in the MFS Aniqa said creating awareness is the major challenge.

The need today is to enhance financial inclusion and create awareness in every nook and corner of the country which is only possible through a robust network of carefully chosen retail partners.

Experts see Mobile Accounts as the most major revenue stream for the MFS industry which works as a bank account in the consumer's phone. Mobile accounts can be opened as Level- 0 with Rs. 15,000 money sending transaction limit per month and Level-1 for a 60,000 money sending limit, at any of the more than 400 Mobilink Business Centers across the country, told Aniqa.

Currently 85pc of the population does not have access to a formal banking system and they are dependent on undocumented ways for transacting money causing major loss to the economy. By pulling the informal transaction into the formal market, MFS helps boost the economy through tax payments, reduces illicit payments and prevents money laundering, Aniqa said.

The State Bank of Pakistan has provided a level playing field to all the operators she said, and in collaboration with the MFS players and stakeholders, SBP is consistently working towards making m-banking enter the next era. From a consumer's point of view, the number of retailer footprint has grown past the number of conventional banking touch points in the country. While all sorts of services will be possible in the near future, Mobicash promises insurance and savings products, ATM cards and further growth in the network of its retail partners to take m-banking solutions to the remotest areas of Pakistan.

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Source: Nation (Pakistan)

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