High transaction charge deters mobile users from using MFS
The mobile financial service (MFS) have not become popular in the country due to high transaction charges on digital payment, says a recent study.
According to the study prepared by the Better than Cash Alliance, government entities, businesses and individuals make only 12 per cent of payments by value and 6 per cent of payments by volume electronically.
“The majority of all payments made in Bangladesh are still in cash,” Emanuela Lecchi, acting head (Asia Pacific) of GSMA, told The Independent during her recent visit to Dhaka.
Mobile users prefer cash payment and express apprehension about the safety issues relating to MFS. They also say that extra charges on the service deter them from using the digital payment system.
A service recipient has to pay 2 per cent transaction charge for the payment of every Tk. 100 through MFS to take serial for Faith, a private organisation that offers online therapy for autistic children.
However, if the service recipient makes payment in card, he/she has to bear a transaction charge of 5 per cent.
In this situation, people normally will not prefer to pay in cash, but the option of paying by cash is not even available, complained named M Hasan, one of the service recipients. ‘If I had the opportunity to pay by cash here, I would never have used MFS,” he added.
“Fraudulent activities have become too common in all spheres of society. Even though the option of cashless payment sounds better, I’m happy with cash in my pocket,” he added.
Lack of awareness, high risk of security and insufficient transaction limits are also hindering the growth of MFS, according to the study titled “Mobile financial services for MSEs in Bangladesh: prospects and challenges”.
The study notes that nearly eight million MSEs in Bangladesh, among which 46 per cent use MFS for business purposes. It shows that 32 percent of the MSEs made at least one business-to-business transaction.
High transaction cost is keeping more than half of Bangladesh’s micro and small enterprises (MSEs) away from using mobile financial services for business purposes.
The study was carried out among 500 MSEs, of which 64 per cent do not use MFS because of the high transaction fee.