Cashless payments or digital transactions have seen a significant surge across the country in recent years, thanks to the adoption of various digital payment methods including credit cards, debit cards, and app-based and QR code-based dealings.
Bankers and users attribute this expansion to the speed, ease of use, security, cost-effectiveness, and convenience offered by digital payment methods.
Moreover, the availability of different types of lucrative offers provided by banks and Mobile Financial Services to attract customers has further propelled the popularity of digital transactions.
Customers now enjoy the flexibility to manage their bank accounts, pay bills, and conduct various transactions through internet banking.
Additionally, they can easily purchase goods, settle bills, and reserve tickets using a variety of apps and websites.
The remarkable surge in digital transactions ahead of Eid-Ul-Fitr, the largest festival for the Muslim community in Bangladesh, is driven by increased shopping and financial activities as people prepare for the celebration.
During this festive period, digital payments provide a convenient and secure way for individuals to make purchases and send money to their loved ones, further fuelling the demand for digital transactions nationwide.
In anticipation of Eid, banks and other service providers frequently announce enticing offers for transactions made through their platforms, attracting a large number of people to engage in digital payments.
Arif Quadri, managing director and CEO of United Commercial Bank, remarked, 鈥楧igital transactions offer unparalleled convenience, enabling individuals to make payments from anywhere at any time without the need to visit physical bank branches or ATMs. This convenience is particularly appealing to the younger generation, who are more inclined towards digital and smart payment methods.鈥�
During the COVID-19 pandemic, digital transactions have been perceived as safer and more hygienic compared to cash transactions, fostering a sense of security and encouraging more people to transition to digital payment methods.
Quadri emphasised that increasing awareness and knowledge about digital systems among the population will accelerate the expansion of digital transactions.
While acknowledging the government鈥檚 support for digitisation efforts, he underscored the importance of active engagement from individuals to boost the growth of the digital economy.
According to Statista, the total transaction value in Bangladesh鈥檚 digital payments market is projected to reach $15.49 billion in 2024, with an annual growth rate (CAGR 2024-2028) of 11.72 per cent, leading to a projected total amount of $24.13 billion by 2028.
As of January 2024, data from the Bangladesh Bank indicates that 2.4 million people use credit cards, 34.56 million use debit cards, and 5.12 million use pre-paid cards.
With these cards, the number of local and foreign currency transactions totalled 49 million, amounting to TK 46,188 crore.
The volume of transactions through various digital channels such as magnetic ink character recognition (MICR) & non-MICR, electronic funds transfer (EFT), real-time gross settlement (RTGS), Internet Banking, and e-commerce has surged in 2023, reaching Tk 1,83,052 crore, Tk 68,182 crore, Tk 81,640 crore, Tk 4,35,028 crore, Tk 81,640 crore, and Tk 1,563 crore, respectively.
The utilisation of both credit and debit cards has been steadily increasing over the past few years, with many individuals now preferring to purchase goods and services through e-commerce platforms from the comfort of their homes or offices, according to bankers and experts.
Credit card transactions witnessed a notable increase, rising to Tk 2,916 crore in December, compared to Tk 2,489 crore in December 2022 and Tk 2,229 crore in December 2021, as per Bangladesh Bank (BB) statistics.
Similarly, the volume of transactions via debit cards reached Tk 41,752 crore in December 2023, up from Tk 36,710 crore in December 2022 and Tk 24,357 crore in December 2021.
Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank, observed, 鈥榃ith Eid-Ul-Fitr approaching, there has been a substantial surge in digital transactions and demand for digital payment methods.鈥�
He highlighted the significant increase in digital transactions, particularly among the youth, driven by technological advancements.
The senior banker emphasised the preference of young people for digital and smart payments, citing the convenience of avoiding physical visits to banks or shopping malls for transactions.
He also stressed the importance of transitioning towards a cashless economy to enhance transparency and inclusivity.
He highlighted that digital payment systems offer easy and efficient payment methods, attracting many individuals to embrace digital transactions.
He noted the increasing use of apps, QR codes, and credit cards for payments.
He suggested that the government should incentivise the sector to realise its vision of a paperless society.
However, Mahbubur Rahman also emphasised the need for the government to focus on improving internet speed and coverage and providing smart devices to enhance digital transactions.
In terms of security, Mahbubur Rahman emphasised that clients have a responsibility to keep their personal and card information secure.
He highlighted the importance of increasing awareness among stakeholders and ensuring optimal security measures by payment system providers.
Since their inception in 2018, app-based payments have surged in popularity in Bangladesh, particularly among the youth, driven by their strong demand for apps.
This trend can be credited to the widespread use of smartphones, enhanced internet connectivity, and the convenience and security provided by these services.
The number of internet banking customers surged to 83.31 lakh in December 2023 from 62.52 lakh in December 2022 and 44.39 lakh in December 2021, with the transaction amount reaching Tk 81,640 crore in 2023 from Tk 27,558 crore in 2022 and Tk 20.55 crore in 2021.
Mobile banking usage is increasing daily in the country, leading to a rise in digital transactions.
The transaction amount of mobile financial services shot up to 1.24 lakh crore in 2023, with the number of MFS subscribers reaching 21.91 crore.
Bankers noted that the willingness of suppliers and customers to use online platforms for conducting business and purchasing products has helped expand electronic trade in the country.
Nevertheless, they added that this is a positive sign for the economy, as increased consumption plays a role in growing the country鈥檚 economy and recovering from significant shocks.
The Bangladesh Bank has intensified its efforts to expedite the cashless journey and has moved to bring millions of small businesses, such as street vendors and lower-income groups, under the virtual transaction system.
The central bank launched Bangla QR, a uniform digital payment system, in January 2023, which is cost-effective, secure, and cardless, and is expected to significantly promote digital transactions in the economy.