MFS transaction charge in Bangladesh should be reduced: Nagad MD

Nagad MD Tanvir A Mishuk tells New Age in an interview

HM Murtuza | Published: 23:48, Jan 25,2020 | Updated: 20:29, Jan 26,2020


Nagad managing director Tanvir Ahmed Mishuk is seen at a recent interview with New Age in Dhaka. — New Age photo

The mobile financial service transaction charge in Bangladesh should be significantly brought down, said digital financial service Nagad’s managing director Tanvir A Mishuk in a recent interview with New Age.

The charge should be cut in order to make the service more affordable for the unbanked people with a view to promoting financial inclusion, he further said at the Nagad office at Banani in the capital.

Customers of the country’s mobile financial service providers have been made hostage by forcing them to pay high transaction charge, he observed.

Tanvir also mentioned that Nagad’s achievement of the one-crore customer base and the Tk 100-crore daily turnover mark within the nine months of the beginning of its full-fledged operation was beyond his expectation.

Launched on March 16, 2019, Nagad is a joint-venture entity of the Bangladesh Post Office and Third Wave Technologies Limited, in which the BPO holds 51 per cent and TWT 49 per cent stake.

Asked about the government’s benefit from Nagad, Tanvir said that the government had been receiving 51 per cent of Nagad’s operating revenue against its shares without making any investments.

Besides generating revenue for the government, Nagad has ensured the lowest MFS transaction cost for the customers, the Nagad MD said.

As Nagad gives a Tk 5 cash-back against each Tk 1,000 cash-in, the actual charge becomes Tk 9.5 for a Tk 1,000 cash-out through Nagad, he said.

On the other hand, other MFS operators charge Tk 18.5 fee for Tk 1,000 cash withdrawal, he said, adding that this charge was the highest if compared to other countries.

As there was earlier no option, the customers were made hostage and forced to pay such high charge, he alleged, saying that the charge now should be brought down.

Born in 1984, Tanvir achieved success in the information telecommunication sector within a very short time and Nagad became a major market player in the MFS sector under his leadership.

Speaking about the key reasons for Nagad’s success in customer acquisition, Tanvir said, ‘The introduction of the artificial intelligence-enabled customer verification process (known as” know your customer”) has made it possible for Nagad to acquire such a huge number of subscribers in a very short time.’

The electronic KYC verification takes only one minute to verify a customer by synchronising with the national database whereas the traditional paper-based KYC verification sometime takes more than a week, he said, adding, ‘The paper-based verification of customers was the key reason for the less-than-expected financial inclusion by the MFS.’

‘The electronic KYC verification worked tremendously and the achievement of Nagad has exceeded even our desired goal by facilitating anyone opening a Nagad account without facing any hassle,’ the MD said.

The process is so easy that everyone having a smartphone is able to complete the process with full accuracy, the entrepreneur said.

Nagad has a unique feature that enables its customers to send money to any phone (SMTAP).

However, the recipient of the money will have to open a Nagad account first on his/her own or from any nearby ‘Uddokta Point’ to withdraw the money within a certain period of time, the Nagad chief mentioned.

‘Everyone having a mobile phone number has the right to receive money,’ he said, adding that the product was launched taking the principle into the consideration.

Tanvir also mentioned that prime minister Sheikh Hasina’s instruction, issued in December last year, on disbursement of government allowances provided under the social safety program through Nagad accounts  was another blessing for the MFS operator.

Once the process starts, no one would be able to extort the government social safety net beneficiaries, he said, adding, ‘It would also make the total process very much convenient for the allowance recipients.’

Dubbing the agreement signed between Nagad and Robi on January 16 as another milestone for Nagad, Tanvir said, ‘Our customer base would boast six crore accounts once the process to enlist Robi’s customers into Nagad is completed.’

Nagad would then become the market leader in terms of customer base as bKash has around four crore customers, the innovative IT entrepreneur said.

Robi has handed over their entire customer data to Nagad for including them into the digital financial solution.

Under the process of enlisting the customers, a system-generated call would be made to each of the Robi customers to take their consent in opening the Nagad account and to pull their information from the telecom operator’s system.

The process would be launched by May this year, he said.

Speaking about Nagad’s business plan, Tanvir said that the Nagad accounts would turn into ‘national accounts’ by the end of 2020 as Nagad would be able to provide each and every financial solution, including government’s allowances and financial transactions.

In addition to the government’s getting 51 per cent of the operating revenue, Nagad meets up the operating costs out of the rest 49 per cent of the revenue, he said.

Expressing his eagerness for Nagad to be included in the interoperability service, which is expected to be launched by the central bank soon, the MD said that it would further facilitate financial inclusion.

He would not, he hastened to add, be associated with anything that would hinder Nagad’s growth as well as financial inclusion.

‘We have no reservation on going under the central bank’s regulations, but we will not become part of anything that will hinder achieving the prime minister’s vision,’ Tanvir said.

Nagad does not want to become a part of the interoperability service if the transaction charge for the service results in additional cost for the customers, he affirmed.

Arguing in favour of the higher transaction limit through Nagad, Tanvir said that micro, small and medium businesses, which were mainly driving the country’s economy, were opening Nagad accounts only because of the high limit.

The limit fixed for the MFS operators by the central bank does not facilitate fulfilling their required daily transaction limit and that’s why Nagad increased the transaction limit, he said.

Asked about the retained money in the Nagad customers’ accounts, he clarified that the entire money was transferred to the BPO’s treasury account on daily basis.

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