BB may launch in January MFS operator-bank interoperability

HM Murtuza | Published: 00:00, Nov 03,2019


The Bangladesh Bank is likely to launch interoperability between the mobile financial service operators and the banks in January, 2020 with a view to making financial transactions more convenient for customers.

A senior official of the central bank told New Age on Monday that once the service was launched, customers would be able to transfer money from one MFS operator’s account to another MFS operator’s account in real time.

Besides, MFS accountholders would be able to send money to any bank account.

Similarly, MFS accountholders would also get scope for receiving money from bank accounts.

However, customers of Nagad, which is a mobile-based financial service operator under the Bangladesh Post Office and is yet to get approval from the BB, would not be included in the interoperability facility.

The BB official also said that the introduction of the interoperability service would also give some fresh boost to the MFS operators, especially small ones.

The unbanked population of the country would be the most beneficiary as the scope would wipe out barriers for them to making transaction with banks, he said.

Taking the high MFS cash-out charge into consideration, the interoperability service would help bring down cost of transaction as well.

The service would be settled by the use of the National Payment Switch Bangladesh of Bangladesh Bank and the BB has already run mock test in this regard.

Currently, three types of interbank ATM transaction — cash withdrawal, balance enquiry and mini statement — can be done through the NPSB.

As of October 2018, 50 banks were interoperable for point of sales transactions and 19 banks were interconnected for their internet banking fund transfer transaction.

‘The option of interoperability would help contain monopoly in the MFS market,’ ATM Tahmiduzzaman, company secretary of United Commercial Bank, parent entity of MFS UCash, told New Age last week.

‘People usually open account with the MFS operator that has higher customer base, taking the easy accessibility issue into consideration,’ said Tahmiduzzaman, adding, ‘As a result, the MFS operators with lower customer base are deprived of acquiring fresh customer even after ensuring better services for the customers.’

Once the interoperability is launched, the customers of large MFS operators would get scope for making transactions with small operators, he said.

The customers of large as well as small operators would get better service quality with an increased market competition, he said.

As on September this year, 16 MFS operators had 7.6 crore registered customers and 3.44 crore customers were active.

On September 22, 2011, the BB for the first time issued separate guidelines on mobile financial service and the guidelines were subsequently amended on December 20, 2011.

As per the guidelines, bank‐led model will be permitted to run MFS service.

Currently, MFS operators are mainly providing cash-in and cash-out transactions along with inward remittance payment, person-to-person transaction, utility bill payment, merchant and government payments.

Besides, several MFS operators are facilitating cash transfer to MFS accounts from banks under bilateral agreements.

As per the BB data, the daily average transaction through MFS operators increased to Tk 1,181.11 crore at the end of July-September quarter of the this fiscal year 2019-2020. The MFS transactions totalled at Tk 1,08,423.30 crore in the period.

More about:

Want stories like this in your inbox?

Sign up to exclusive daily email