Mobile financial services are the new-normal economic reality in the ever-growing digital world. It does not matter whether you are in the first world or third world; you are within reach of mobile financial services (MFS). MFS in Bangladesh is playing a driving role in the digital journey of Bangladesh since its inception in 2011. Mobile financial services can include banking, payments, money transfers, and other types of financial transactions. Mobile financial services are becoming increasingly popular in developing countries, where many people do not have access to traditional banking services.
Table of Contents
What is a mobile financial service?
Mobile financial service uses mobile phones for accessing financial services (transactions or information). It has been an excellent tool for financial inclusion for unbanked people worldwide.
In recent years, there has been a dramatic increase in the number of people using mobile financial services. This is because mobile financial services offer a number of advantages over traditional banking methods. For example, mobile financial services are more convenient, allow for 24/7 access to your account, and are often less expensive. In addition, mobile financial services can be used to send money to friends and family members, and make payments for goods and services anywhere and at any time. They no longer have to visit a bank or ATM to withdraw or deposit money. This is especially useful for people who are always on the go and do not have time to visit a traditional bank. Another benefit of mobile financial services is security.
What is Mfs Account in Bangladesh?
An MFS account in Bangladesh is a mobile financial services account that allows customers to access banking and other financial services via their mobile phones. Customers can use their MFS account to pay bills, transfer money, and make purchases.
Services provided by MFS in Bangladesh
In recent years, mobile technology has emerged as a powerful tool for increasing financial inclusion. In Bangladesh, a number of innovative mobile financial service providers (MFSPs) have launched products that allow customers to conduct transactions without needing a bank account.
With the emergence of MFS, life has been enjoyable and fast. Considering the positive impacts of MFS, Bangladesh Bank has been always supportive of the mobile financial service with policy and overall support. The first guideline for MFS came in 2011 and now Bangladesh Mobile Financial Services (MFS) Regulations, 2022 governs the MFS operations and operators.
Customers can use their phones to send and receive money, pay utility bills, or make purchases at participating merchants. Mobile financial services are providing people in Bangladesh with new opportunities to improve their economic well-being. By making it easier for people to access formal financial services, MFSPs are helping to reduce poverty and promote inclusive growth in Bangladesh.
Mobile Financial Services may include but are not limited to the following services:
- (i) Money transfer
- (ii) Cash in
- (iii) Cash out using mobile account through agents/ Bank branches/ATMs/ Mobile Operator’s outlets;
- (iv) Ticketing of trains, buses, movies
- Person to Business Payments (Credit card bills payment, Electricity bills, Gas bills, Water bills, Internet bills, Cable TV bills, School/College/University bills);
- (v) Payments for products or services
- (vi) Government to Person Payments (e.g., elderly allowances, freedom-fighter allowances, subsidies, etc.);
- (vii) Donation;
- (viii) Adding money from banks/credit cards;
- (ix) Mobile recharge
- (x) Business to Person Payments (salary disbursement by organizations);
- (xi) Disbursement of inward foreign remittances;
- (xii) Person to Government Payments (tax, levy payments);
- (xiii) Other payments like microfinance, overdrawn facilities, DPS, Premium payments.
Mobile financial service in Bangladesh fact files
Advantages of MFS
Mobile Financial services come with tons of features and benefits fitted with the modern era of digitization. It has been very popular and impactful in many regions of the world. Great features have made the services grow over the last decade since their inception in 2011 in Bangladesh.
Mobile financial services provide 24/7 accessibility to individuals, enabling them to manage their finances anytime and anywhere. With just a tap on their mobile devices, they can check their account balance, transfer funds, pay bills, and invest in various financial products. The convenience of accessing financial services anytime and anywhere saves time and effort, especially for individuals who have a busy schedule. The 24/7 accessibility of mobile financial services also provides peace of mind for individuals who may need to manage their finances on-the-go, such as during an emergency or when traveling. The ease and convenience of mobile financial services make it an indispensable tool for managing one’s finances effectively and efficiently. You have the freedom to access your fund any time of the day and any day of the week without limiting working hours or vacation. Your mobile wallets are with you.
MFS is the most influential financial inclusion
Financial inclusion refers to the ability of individuals and businesses to access basic financial services such as savings and loans. Mobile financial services provide a platform for financial inclusion by enabling people who were previously excluded from traditional banking services to access a range of financial products and services through their mobile phones. This has numerous benefits including increasing access to financial services for those in remote and underserved communities, increasing the speed and efficiency of financial transactions, reducing the cost of accessing financial services, and improving the overall financial stability of communities. By promoting financial inclusion, mobile financial services help to promote economic growth and reduce poverty levels.
Optimizing your money
As you can pay instantly, you need not deposit beforehand and get stuck in your fund. Therefore, you are set to make optimum use of your fund. Optimizing your money with the help of mobile financial services is a smart financial move. With these services, you can manage your finances in real time from anywhere in the world. This includes features such as budget tracking, bill payments, and money transfers. You can also receive notifications for payments due and get an overview of your spending patterns. With mobile financial services, you can save time and money with their ability to automate savings and set up automatic investments. Additionally, you can compare different investment options and make informed decisions. Furthermore, you can easily access loans and credit cards through your mobile device. Optimizing your money through mobile financial services is an advantage you don’t want to miss.
Mobile banking services and MFS are relatively secure for financial transactions. In addition to your concern, your service provider is also in the fight to secure your fund.
Providing more controls
Your control is in your hands. Your mobile money can be controllable in versatile ways. Offering clarity of where your financial data is going
Giving you tailored options
Mobile financial services provide a wide range of tailored options to users, making it a popular choice for financial transactions. The services are designed to meet the specific needs of each user and provide a personalized experience. The mobile apps allow users to choose from a variety of options such as bill payments, money transfers, investment options, and more. This makes it easier for users to manage their finances from the comfort of their own homes or on-the-go. Additionally, users have the option to set up automatic payments and alerts, making it easier to keep track of their finances and avoid late payments. The tailored options offered by mobile financial services provide a convenient, flexible and efficient way for users to manage their finances, making it an advantage for many.
You can easily and instantly check balances, transfer funds, even deposit checks, find ATM locations, and many more.
Mobile financial services have revolutionized the way people manage their finances. One of the key advantages of these services is the ability to save time. With just a few taps on a smartphone or tablet, people can access their bank accounts, transfer funds, pay bills, and even invest in the stock market. This eliminates the need for long trips to banks or ATMs, making financial transactions faster and more convenient. Additionally, with the use of biometric authentication, the process of accessing one’s financial information and making transactions is even quicker and more secure. Mobile financial services allow people to manage their finances on the go, freeing up time to focus on other important activities. Your fund transfer or payment or finding balances are just a few clicks away. So you need not spend a lot of time on those anymore.
Banking on the go:
Mobile financial services offer customers the convenience of banking on the go. With the ability to access banking services through their smartphones, customers no longer have to waste time waiting in long lines or traveling to a physical branch. The advantage of mobile financial services has made banking more efficient and accessible for customers, especially for those who have busy schedules or live in remote areas. From checking balances and making transfers to paying bills and applying for loans, customers can now do all of these tasks anytime, anywhere. This has significantly improved the customer experience and allowed banks to reach a wider customer base. In conclusion, mobile financial services have brought banking to the next level, providing customers with the convenience and flexibility they need to manage their finances.
Easy to monitor:
As you can monitor your transactions and balances anytime, your surveillance against fraud is always active.
Good for budgeting:
As all your tracks are recorded with balances, you can focus on the budgetary priorities.
Avail of a loan:
Availing a loan through mobile financial services has become a popular option for many individuals. This is due to the ease of accessibility and convenience it provides. You can apply for a loan through your mobile phone in the comfort of your own home or office without having to visit a bank or financial institution. The process is quick and straightforward, with a simple online application form and immediate loan disbursal. Furthermore, mobile financial services offer competitive interest rates and flexible repayment options, making it an attractive option for borrowers. This level of convenience and flexibility makes mobile financial services an advantage for those in need of a loan. Your mobile app is enough to get loans digitally. So apply in your app and get loans instantly.
You may instantly add funds from your banks, credit cards to your MFS account. The features come free of charge.
No or low cost:
MFSs are a great advantage for those who want to access financial services without spending too much money. One of the key advantages of these services is their low or no cost. Mobile financial services allow users to access a variety of financial services such as money transfers, bill payments, and even savings accounts, all without having to spend a lot of money. This is particularly beneficial for people who are on a tight budget or who don’t have access to traditional financial services. Additionally, the no-cost or low-cost nature of these services means that people in developing countries can access financial services without having to pay high fees, which can be a barrier to entry for many. Overall, mobile financial services are a great option for anyone looking to access financial services without breaking the bank.
Offers and Rewards
Offers and rewards are one of the biggest advantages of mobile financial services. They provide a convenient way for customers to save money on purchases and receive special incentives for using the service. With mobile financial services, users can take advantage of discounts, cash back, and other special deals that are exclusive to the service. These offers and rewards can be redeemed directly from the user’s mobile device, making it easy and convenient to use. Additionally, these services often offer loyalty programs and other incentive-based systems to reward frequent users and encourage customer retention. Overall, the availability of offers and rewards makes mobile financial services a highly attractive option for consumers who are looking to save money while also taking advantage of the convenience and security of digital finance.
Disadvantages of MFS
Mobile Financial services do not come without disadvantages. There are drawbacks during the MFS journey. Some of the problems are presented below:
As the fund is easily and instantly transferable, unnecessary expenses are very common these days. Excessive expenses are a major disadvantage of mobile financial services. Mobile financial services are often more expensive than traditional banking services due to fees for transactions, account maintenance, and other services. The fees can quickly add up, especially for people who rely heavily on mobile financial services to manage their finances. Additionally, the fees associated with mobile financial services can be opaque and difficult to understand, which can lead to confusion and frustration among users. This can negatively impact the adoption of mobile financial services and undermine the financial health of low-income and underbanked populations, who are most in need of access to affordable financial services.
MFS makes loans and adds money easy and quick. However, the availability of funds and loans leads to overindebtedness. People face problems during repayments and may face credit score hampers. Debt trap is one of the major disadvantages of mobile financial services. With easy access to loans and other financial products through mobile phones, people can easily get into a cycle of debt. Many mobile financial service providers offer loans with high-interest rates, which can quickly become unaffordable for borrowers. This can lead to a situation where the borrower is unable to repay the loan, leading to a cycle of debt that can last for years. In addition, many mobile financial services do not have proper safeguards in place to protect vulnerable users from falling into debt traps. This results in a situation where people who need financial assistance the most are being trapped in a cycle of debt, which can have serious long-term consequences for their financial health.
Frauds and Scams
MFS scams and frauds are common in Bangladesh. Frauds and scams are a significant disadvantages of mobile financial services. The increasing popularity and convenience of mobile banking have also attracted malicious actors who seek to exploit vulnerabilities in these services. Scammers often impersonate legitimate organizations to trick users into revealing their personal and financial information. Mobile payment services are also vulnerable to phishing scams where fraudsters create fake websites or apps that appear to be legitimate and trick users into entering their financial information. These frauds and scams can result in significant financial losses for consumers and erode trust in mobile financial services. Financial institutions must implement robust security measures to prevent fraud and ensure that consumers are protected from these malicious activities. There are ways to upgrade the security aspects but still, the fraudulent groups are active in versatile manners.
There is a monthly cash-out limit, a cash-in limit too. Daily transactions have also limits. So, you can not transact the amount you desire. You are to maintain the limits properly. Transaction limit is a disadvantage of mobile financial services as it restricts the ability of users to carry out large transactions. This limits the ability of users to carry out large purchases or transfers, making it difficult for businesses to use the platform for their financial transactions. The transaction limit also affects users who need to send money to their friends and family in other countries as they will have to make multiple transfers to reach the desired amount. Additionally, users who have a large amount of money saved in their mobile financial service account will have to withdraw it in parts, which can be inconvenient and time-consuming.
What is Mfs Provider?
An MFS provider is a company that helps to connect businesses with the right financial services providers. They work with a range of different companies, from banks and investment firms to insurance companies and pension funds. By working with an MFS provider, businesses can get access to a wider range of products and services, as well as advice on which ones would be best for them.
MFS providers usually have a team of experts who can advise businesses on the best financial products and services for their needs. They will take into account factors such as the size of the business, its sector, and its location. This means that businesses can get tailored advice on which products and services would suit them best.
How many mobile financial services are there in Bangladesh?
There are 13 mobile financial service providers in operation now in Bangladesh with more than 14.77 lacs agents and 6.71 crores of active accounts (Total registered clients 18.31 crores). 12 providers are bank-led, and Nagad is Bangladesh Post Office-backed. However, some banks, including Premier Bank Ltd., Eastern Bank Ltd, etc., have closed their MFS accounts.
List of Mobile Financial Services Providers (MFSP) in Bangladesh
- Rocket (DBBL) by Dutch-Bangla Bank Limited.
- Bkash by BRAC Bank Limited.
- MYCash by Mercantile Bank Limited limited.
- mCash by Islami Bank Bangladesh Limited
- Trust Axiata Pay (TAP) byTrust Axiata Digital Limited
- First Pay SureCash by First Security Islami Bank Ltd
- UPAY by UCB Fintech Company Limited
- Ok Wallet by ONE Bank Limited.
- Rupali Bank SureCash by Rupali Bank Ltd
- TeleCash by Southeast Bank Ltd
- Islamic Wallet by Al-Arafah Islami Bank Ltd
- Meghna Bank Tap n Pay by Meghna Bank Ltd
- Nagad by Bangladesh Post Office.**
Which is the best mobile financial service in Bangladesh?
There are many MFS in the Bangladeshi market, but most are not stable and profit-making. Many have already ceased their operations. However, a few of them are excellently performing their functions and doing great in the digital journey of Bangladesh. The most impactful mobile financial service providers in Bangladesh are the following three. These 3 MFS are successful in customer acquisition, innovation, versatility, and operations. These three market players in Bangladesh cover around 90% of customers and transactions.
- Bkash by BRAC Bank Limited-The leading mobile financial service in Bangladesh and the market leader
- Nagad by Bangladesh Post Office-The fastest growing mobile financial service in Bangladesh
- Rocket by Dutch-Bangla Bank Limited- The first mobile financial service in Bangladesh
Why do some MFS providers cease operations?
There are many reasons for the closure of these accounts. For example, the cost of maintaining accounts may be too high, barriers to entry by leading MFS, or there might not be enough customers to make it worthwhile.
There are so many supportive measures from the regulatory standpoints by Bangladesh Bank, the Central Bank of Bangladesh, to promote the MFS ecosystem. We will discuss some of the initiatives from Bangladesh Bank in short:
Regulations for MFS: Bangladesh Bank has introduced rules and regulations for MFS to cover the industry better. Bangladesh Bank has addressed every possible aspect of the regulatory framework from time to time since the inception of MFS in Bangladesh in 2011. The instructions include:
Monitoring: As the supreme authority of MFS, Bangladesh Bank has always kept a close eye on the operations. Continuous tracking has kept problems, fraud, and scams to a minimum.
e-KYC: The adoption and implementation of e-KYC for banks and MFS is a milestone for remote opening and accessing MFS.
Transaction Limit: Bangladesh Bank has revised the transaction limit when and where necessary to ease the transactions. Market demands have always given priority to set limits.
Novel Corona Virus and the rise of MFS
The radical rise of MFS transactions has occurred during the coronavirus era. As other banking and payment methods suffered a pause, MFS was the savior to ensure the continuation of services along with ATMs. Bangladesh Bank instructed the providers several times to provide uninterrupted services by MFS and ATMs during the corona.
MFS and the growth of small businesses
With the active supports from mobile financial service providers, small businesses based on Facebook Pages are growing fast. Many pages with products and services like the dress, food, household items, ornaments, books, and what’s not. Single persons can now run business units as there is no need for personal involvement to manage payments.
Ecommerce and the MFS
MFS has the most important role in the development of e-commerce platforms in Bangladesh. Ecommerce firms use digital payment solutions that needed supports from MFS. However, the e-commerce sector has recently faced a major fall. MFS providers are also in trouble regarding the stuck funds in escrow accounts. Another challenging incident took place as the e-commerce firms took undue facilities of refund from the MFS.
For the last ten years, the history of mobile financial services in Bangladesh started in 2011. So it is fair to know how the money transfer looked before 2011. Sending money before 2011 was quite a physical matter controlled by the Post Office, Banks, and courier service(SA Paribahan). SA Paribahan was extremely popular for quick and hassle-free money transfers.
FAQs on MFS in Bangladesh
Which is the best mobile financial service in Bangladesh
Bkash is the best mobile financial service in Bangladesh, with innovative and secure services and reasonable charges. bkash account is easy to open and operate too. Nagad is also doing well and rising fast.
Who are offering mobile financial services in Bangladesh
Bank-led 12 and Postal-led one providers are offering mobile financial services in Bangladesh
How many mobile financial services are there in Bangladesh
There are 13 mobile financial service providers in Bangladesh
Which is the first mobile banking in Bangladesh
Rocket (previously known as DBBL mobile banking) is the first mobile banking in Bangladesh.
When was the first mobile banking in Bangladesh?
DBBL started providing the first mobile banking in Bangladesh in May 2011.
What are the main providers of MFS in Bangladesh?
Answer: The main providers of MFS in Bangladesh are bKash, Nagad, Upay, and Rocket.
What are the types of services offered by MFS in Bangladesh?
Answer: The types of services offered by MFS in Bangladesh include mobile banking, bill payments, money transfers, and microfinance.
How safe is MFS in Bangladesh?
Answer: MFS in Bangladesh is generally considered safe, with strict regulations in place to protect users’ financial information and transactions.
How easy is it to use MFS in Bangladesh?
Answer: MFS in Bangladesh is easy to use, with simple registration and activation processes and user-friendly mobile applications.
What are the benefits of using MFS in Bangladesh?
Answer: The benefits of using MFS in Bangladesh include increased access to financial services, lower transaction costs, and greater convenience.
What are the challenges of using MFS in Bangladesh?
Answer: The challenges of using MFS in Bangladesh include limited financial literacy, a lack of digital infrastructure in rural areas, and security concerns.
Is MFS accessible to all in Bangladesh?
Answer: MFS is accessible to all in Bangladesh, including rural populations and those without traditional bank accounts.
What is the role of the government in regulating MFS in Bangladesh?
Answer: The government in Bangladesh plays a crucial role in regulating MFS, ensuring that providers adhere to strict standards and protecting users’ financial information.
How does MFS contribute to financial inclusion in Bangladesh?
Answer: MFS contributes to financial inclusion in Bangladesh by increasing access to financial services for underbanked populations, including rural populations and low-income groups.
What is the impact of MFS on the economy of Bangladesh?
Answer: The impact of MFS on the economy of Bangladesh has been positive, with increased access to financial services leading to greater economic growth and development.
What is the future of MFS in Bangladesh?
Answer: The future of MFS in Bangladesh looks promising, with continued growth and development of the sector driven by increasing demand for digital financial services.
What is the role of MFS in reducing poverty in Bangladesh?
Answer: The role of MFS in reducing poverty in Bangladesh is significant, by providing greater access to financial services, including microfinance, to low-income populations.
MFS in Bangladesh has been a very successful initiative brought by bank-led ventures and facilitated by Bangladesh Bank. The service has helped the growth of many business ideas. Digital Bangladesh is getting momentum with the versatile digital services catered by mobile financial services. Financial inclusion has also been geared up with the magic of MFS.