Branchless Banking Witnesses Innovation and Expansion in 2014

Branchless Banking sector has witnessed tremendous growth and advancement in the closing year of 2014 with increasing number of users, launch of various innovative products and services and expansion of the network.

The sector has witnessed terrific growth in the transactions values and volumes. Five operators along with their owned and partner banks have entered into this flourishing, lucrative and emerging market and we’ve seen an increasing amount of competition among all operators.

According to an estimate, the overall transaction value has increased to Rs 100 billion on monthly basis against an average transaction of 25 million per month.

Warid Launches Mobile Paisa

Warid Telecom first soft launched its branchless banking service in January which was followed by an official launch in July  with 2,000 agents in 500 cities. It has collaborated with Bank Alfalah Limited and Monet as a technological solution provider.

The entry of Warid Telecom in branchless banking sector pushed all operators into another price war in the financial sector. Now, all five telecom operators are operating with their own branchless banking service in the country, leveraging their userbases to convert a largely unbanked society into a banked one.

Telenor Abandons Its Plan To Acquire Tameer Bank

Telenor Pakistan has abandoned its plan to acquire the 49 percent remaining stake in Tameer Microfinance Bank. They have decided not to get 100 percent shareholding in the banking company after a lapse of one year of the process coupled with shifting of the policy towards technology business from financial markets.

Sources said Telenor has postponed its plan to buyout 49 percent shares from minority shareholders and has deferred it to a later time in future as its focus has been shifted to 3G technology business in the country.

The acquisition of the shares is a hectic process involving negotiations with minority shareholders and due diligence of the bank. The due diligence was completed within 2 months but the talks with shareholders saw protracted delays due to bargaining between the majority and minority shareholders.

Later, the negotiation between management and shareholders took more than four months to get concluded. Even then, some shareholders were not convinced with the prices, which were reduced to Rs43 per share from Rs80 per share as per demand—almost 50 percent decline in the offer price by minorities.

The telecom operator has not gained sufficient experience to tackle regulatory matters with State Bank of Pakistan without the president Nadeem Hussain and his team, said an official who was the member of launching team of Easypaisa and quit Tameer Bank due to conflict with Telenor’s management.

The business model of telecom and banking sectors is entirely different with separate regulator, though the financial issue is more sensitive involving different issues of transparency and money-laundering, which is beyond the approach of Telenor, he added on the condition of anonymity.

I am firm that Telenor could not run Easypaisa successful with Tameer Bank’s team in the scenario when the competition is getting intensified in the sector, an ex-official of Tameer Bank said.

Telenor Pakistan is already owner of the bank with 51 percent majority of the shares which it bought in 2008 against an investment of $12.5 million or one billion rupees.

Telenor Introduces IBFT via 1-Link

Telenor Pakistan and Tameer Microfinance Bank, the pioneer and market leaders, have launched an innovative product of Interbank Fund Transfer Facility (IBTF) for its customers under Easypaisa which enabled their customers to transfer funds between a number of banks (account-to-account) via the facility of 1-link switch.

The IBTF service is one of the most highly utilized services since its launch in the banking industry which was later introduced by Ufone through Upayment .

The service was later launched by Easypaisa in branchless banking, Ufone for Upaisa and Mobilink for Mobicash for over the counter (OTC) customers. The trend is being followed by other operators as well.

Zong Timepey Accomplishes G2P Project For IDPs

Zong’s Timepey service accomplished its G2P projects of Rs 4 billion to 400,000 Internal Displaced Persons (IDPs) in October and November.

Timepey offered the minimum rates for disbursement service. It charges 1.29 percent fee of the total amount of transfer to IDPs which is less than half of the different players. The project is very unique because the companies’ efficiency is exhibited with a handsome amount and huge number of beneficiaries seeking financial aids in shortest possible time for their genuine needs.

Upaisa Launches Debit Card Facility

Umicrofinance Bank has introduced a Debit Card Facility for customers of Upaisa. This Debit Card facility is available on ATM card as well. The card is workable at shopping places having service partnership with Union Pay.

Upaisa has also signed an agreement with Meezan Bank in which its customers having ATM cards could use its more than 300 ATMs without any charges.

Waseela Bank Launches Debit Card Facility

Waseela Bank also introduced a Debit/ ATM card facility for their customers. It can be operated at any 1- Link or MNET ATMs across the country at more than 7,600 points.

Overall, the branchless banking sector witnessed expansion of the agents which increased to 168,615 as of June-end 2014, said the latest available figures of State Bank of Pakistan. The agents network must exceeded the given numbers later till December-end on whereas it stood at 125,027 by end of December 2013.

The overall m-wallet accounts increased to 4.2 million as of June 2014 as compared with 3.5 million by the end of December 2013.

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