If you are a mobile banking service (MFS) user in Bangladesh, you must have transferred money from your bank account to your mobile wallet. Or you might transfer money from one mobile wallet to another. The provision that allows you to do this is interoperability in mobile financial services.
This blog explains interoperatiblity and how it has become a change maker in the MFS industry of Bangladesh.
Interoperability in the MFS Industry of Bangladesh: What are its uses?
In simple terms, as a user, interoperability allows you to change service providers. You can switch to another MFS service provider without opening a new account with the new service provider. We also have interoperability between mobile operators, allowing users to switch operators while adhering to certain guidelines.
Bangladesh has entered in MFS sector for over ten years. We have seen how MFS helps customers and affects the nation’s economy as a whole. Only providers like bKash, Nagad, Rocket, Upay, and TAP, are prospering. Interoperability has a role in this situation.
So, how can it help us?
Making transactions easier:
As of 2016, over 40% of total mobile money platforms were linked to a bank. Interoperability services allow users to swap funds with other bank customers. By linking to financial networks, operators can provide bank and mobile money account transfers.
Also, interbank infrastructures can be accessed via MFS. Users of mobile money can access services like ATM withdrawals, Credit and debit cards linked to their accounts, or national payment networks for merchants under this setup.
They can also boost the acquisition of new bank customers. However, to make use of the benefits given by this service, those users may have their bank accounts supported with a mobile money account.
Money Transferring made simple:
Through compatibility with this platform, cash can be sent or received through “endpoints” managed by money transfer operators. As a result, users of mobile money services can send and receive money from counterparts who may or may not want to utilize the same service.
Above all, these technologies enable transfers between locations where the operator is not present or from those locations. As a result, they make it easier to establish and expand global transfer channels.
Improving public services:
Financial transactions involving public players are also likely to progress toward interoperability. It presents a chance for the government to raise the caliber of public services by improving the “customer” experience of individuals being administered on the one hand and the traceability of transactions on the other.
This is because, in many places, mobile payments make it possible to “remotely” supply services that nevertheless call for traveling to a payment desk, paying travel expenses, standing in line, etc., in many places.
Enabling merchant payments:
By connecting their networks with merchant systems, operators can enable consumers to pay for their purchases using mobile money. Interoperability appears to hold the most promise in this area. However, a significant portion of market transactions is still likely to be done digitally.
Mobile money merchant payment is also ideally suited for dematerialized commodities that may be bought “remotely,” such as games, audio, video, e-books, etc. This applies to both local businesses and those operating internationally.
As a result, purchases on particular platforms might then be possible. Mobile finance services also give a significant possibility to expand online trading in tangible products.
Thoughts of market players:
Smaller market players are keen that interoperability be introduced because they feel that doing so will open up the market. Ultimately it will benefit the general public, much like how opening up the telecom market in the middle of the previous decade helped the general public.
Thoughts of the regulators:
According to experts and concerned parties, the regulator must play a significant role in implementing interoperability. The central bank in some nations is setting the example, like Bangladesh, Indonesia, and more.
So, interoperability is likely to expand the potential uses of mobile money in regions where the use of bank services is still minimal and where they represent the ideal markets for mobile money.
It is a great accelerator since it promotes the addition of new users and the escalation of usage. Overall, it helps to increase the profitability of mobile money services. Things are better when it’s easier. Thus, MFS interoperability would be extremely effective for us!