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On-Line Banking, atms & telecash rule the financial world
Although Pakistan offers tremendous opportunities for investment in the financial sector as the country still has a huge un-banked areas particularly the rural population, yet the telecom sector has come out to fill the gap by expanding the outreach even remotest parts of the country.
Successful use of information technology in the financial sector is an example, which needs to be followed by other sectors with a focus to eliminate the nuisance of corruption, inefficiency by using the technology with the focus to ensure the concept of good governance especially in such services or department where corruption is rampant.
However, as far as the urban population is concerned it is enjoying the real-time e-banking and explosion of automation which has made the customers life more easy unlike the time barriers of banking hours, which have removed the time constraints.
Today, the ATMs remained the preferred channel for cash withdrawals accounting for 81.2 percent of the total amount transacted via this mode. Total ATMs transactions constituted a volume share of 63.8 percent and a value share of 8.1 percent in total e-banking transactions. Moreover, total transactions carried through ATMs showed an increase of 5.9 percent in volume and 6.2 percent in value of transactions compared with that in the previous quarter.
The State Bank of Pakistan has released Payment Systems Review for the quarter January to March 2014. According to the report, 393 new ATMs were added to the network (growth rate of 5.1 percent compared with that in the previous quarter) bringing the total number to 8,077.
Pakistan Real-time Interbank Settlement Mechanism (PRISM), a large value payment system, showed a mixed trend of transactions settlement over the last five quarters. During the current quarter, total transactions settled in PRISM showed an increase of 10.2 percent both in volume and value compared with that in the previous quarter and an increase of 28.7 percent in volume and a decline of 1.6 percent in value of transactions compared with that in the same quarter of the previous year.
The retail payment system in Pakistan is supported by payments made through branch network or through e-banking channels i.e. ATMs, POS, internet banking, mobile phone banking and call Centres/IVR. Out of the existing 11,153 total bank branches, 10,601 are providing Real Time Online Banking services. Total RTOB transactions constituted a volume share of 23.9 percent and a value share of 89.2 percent in total e-banking transactions. In the composition of RTOBs transactions, the share of cash withdrawals is 21.1 percent in volume and 6.7 percent in value of transactions, the share of Interbank Funds Transfer (IBFT) is 42.0 percent in volume and 83.9 percent in value of transactions and residual share of transactions pertain to cash deposits.
As of March 31, 2014, 24 banks are offering Internet banking services, 13 are offering mobile phone banking and 22 are offering call centre/ IVR banking facility to the customers for bill payments, fund transfers and other banking services. During the current quarter, 68 POS machines have been added in the network bringing the total number of POS machines to 33,802.
Internet banking constituted a volume share of 4.4 percent and a value share of 2.1 percent, mobile phone banking constituted a volume share of 1.6 percent and value share of 0.2 percent and call centers/IVR banking constituted volume share of 0.2 percent and value share of 0.03 percent in total e-banking transactions. Moreover, total transactions carried through internet banking showed an increase of 15.7 percent in volume and 7.0 percent in value of transactions, total transactions carried through POS showed an increase of 7.7 percent in volume and 10.4 percent in value, mobile phone banking transactions showed an increase of 14.1 percent in volume and 13.3 percent in value of transactions and total transactions carried through call centre/IVR banking showed a decline of 1 percent in volume and an increase of 4.1 percent in value of transactions compared with that in the previous quarter.
In the composition of plastic cards, debit cards have the highest percentage share of over 90.6 percent followed by credit cards with 5.5 percent and ATMs Only cards with 3.9 percent share as of quarter ended March 31, 2014. The total number of plastic cards showed an increase of 8.6 percent compared with that in the previous quarter and a growth of 11.7 percent compared with that in the same quarter of the previous year.
Telecoms role in swift cash transfers
Mobicash retailer footprint has spread to more than 35,000 retailers across Pakistan in just 18 months. The milestone renders Mobicash as the fastest growing Mobile Financial Services (MFS) footprint in the country. Led by Mobilink’s robust Sales and Distribution model, Mobicash possesses the second largest MFS retail network in Pakistan, with the total value of transactions being over Rs18 billion in 2014 alone. Mobicash started with 1,000 retailers in Nov, 2012. The rapid growth of agent network has had a significant impact on transaction volume, which stands at above 7.3 million in 2014, growing by more than 190 percent over the same period last year.
Aniqa Afzal Sandhu, Director Mobicash commenting on the achievement said, “Mobicash aims as taking financial services to the remotest regions in the country. Our strategy of increased retail agent activity has resulted in the deployment of effective channel management processes and manifested Mobicash as the most trusted channel of money transaction. I am confident that Mobicash retailer network will continue to play a significant role in developing the branchless banking ecosystem in Pakistan.”
The Mobile Financial Services industry remains pre-dominantly an over-the-counter (OTC) market as 98 percent of customers use OTC services for transactions making the role of retailers critical for growth. Mobilink started its operations in November 2012 in collaboration with Waseela Microfinance Bank and offers over-the-counter services which include utility bill payment, money sending and receiving facility and a bouquet of services through Mobile Wallet solution. Mobilink’s retailers are strategically spread between rural and urban areas to maximize financial outreach across Pakistan.
Mobilink is Pakistan’s leading provider of voice and data services. With over 38 million subscribers, Mobilink maintains market leadership with coverage in over 20,000 cities, towns and villages across Pakistan. With an investment of US$4.3 billion in Pakistan, Mobilink continues to innovate through cutting-edge, state-of-the-art technology, a portfolio of Mobile Financial Services, strongest brands, the largest portfolio of value added services, the largest bio-metric SIM verification footprint as well as the country’s largest network with over 9,000 cell sites. The company also has the largest distribution and call center network that enables it to offer wider accessibility and quality customer services across Pakistan.
