Branchless Banking Transactions Hit Rs. 85 Billion Mark During Jan-March 2012

Branchless Banking has been on the rise, the trend has shown some sluggishness in January-March 2012 quarter but overall turnover remained positive.

During the Quarter ending March 2012, more than 25 million transactions worth Rs. 85 billion (USD 938 million) have been processed through branchless banking channels. Number of transactions and the transacted value has increased by 23% and 7% respectively during the quarter, reported State Bank of Pakistan.

Branchless Banking Transactions remained Rs. 79.4 Billion During Sep-Dec 2011

Growth in agent’s network and number of mobile wallets during the quarter was 19% and 14% respectively.

The number of registered m-wallets has reached to 1.03 million at the end of the March 2012, in which the number of active m-wallets is about 53%. Level 1 accounts are almost 86% of total m-wallet accounts while Level 0 accounts (a category which was allowed in June 2011 by SBP) are only 7%.

In addition, 5,573 debit cards have also been provided to mobile account holders, indicating efforts to create value proposition in m-wallets.

Growth rate of m-wallets stood at 14 %, showing some slow-down compared to the last quarter when the growth rate was around 40%. Similar trend is observed in deposits value.

The less-than-expected growth rate in m-wallets is owed to the fact that only 23% of the total active agents (around 24,101) are authorized by banks to open the m-wallet accounts.

The growth expectation in coming quarters is, however, fairly high as the largest brand of the country is in process of technology up-gradation for account opening, forth which it will start registration of customers for Level Zero Account.

Easypaisa and Omni are progressively exploring avenues to increase the attractiveness of m-wallets to the customers and offering them new services such as purchasing air-tickets, receiving salaries/ pensions, utilizing ATM through debit cards, and internet banking. Moreover, few other banks are likely to start their BB operations soon.

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BB Transactions Growth Continuous

During the Quarter ending March 2012, more than 25 million transactions worth Rs. 85 billion (USD 938 million) have been processed through branchless banking channels.  Number of transactions and the transacted value has increased by 23% and 7% respectively during the quarter.

The growth in number of transactions is mainly due to the increasing volume of bill payments, person to person fund transfers, and airtime top-ups, which accounts for 42%, 32% and 10% respectively.

Similarly, the growth in value of transactions is again owed largely to P2P payments. All other categories have either experienced slightly negative growth or have contributed a small share in total value.

While considering share in total value, all bulk payments constitute almost 50% of the total value of transactions followed by P2P payments (36%) and Bill payment (12%). Growth has been observed in loan repayment transactions as Rs. 312 million were collected through BB agents. Both models (Easypaisa and Omni) are trying to increase their linkages with microfinance providers to allow microfinance borrowers to use BB channels for repayment of loans.

Moreover, volume of salary disbursement has also increased mainly due to Easypaisa‘s arrangement with government organizations for salary disbursement.

Around Rs.13.8 billion have been transferred on account of G2P payments through the existing agents‘ based banking. In this current issue, G2P transactions have been separately incorporated in Table 4, which were previously shown as part of the Account to Person transactions.

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Upcoming BB Solutions:

The Waseela Microfinance Bank Limited, a subsidiary of M/s Orascom, has commenced its business operations as a nationwide microfinance bank. The bank has opened its first branch in Islamabad and aims to enter into Branchless Banking business to increase the outreach of financial services in Pakistan shortly.

Habib Bank Limited has recently obtained permission from SBP to start pilot branchless banking services. SBP has also allowed Faysal Bank to pilot launch its mobile banking services to its existing customer base.

Two other commercial banks, Meezan Bank and Bank Al-Falah, are also keen for entering into branchless banking services.