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Virtual wallet for all

Aug 25, 2011

The first complete mobile financial service in Bangladesh will enable ordinary people to receive electronic money in their mobile phone accounts which they can cash-out through agents. The mobile wallet is a secure platform to enjoy banking services without holding a formal bank account.

Bangladesh's first complete mobile financial services provider, bKash Ltd, a BRAC Bank subsidiary, launched its operations on July 21. A tête-à-tête with Kamal Quadir, chief executive of bKash Ltd., gives a glimpse into his vision for mobile banking in Bangladesh. 

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"Capitalising on the fact that Bangladesh already has universal wireless network coverage, widespread personal ownership of mobile phones and a favorable regulatory environment, bKash presents a compelling business plan and social uplifting agenda to dramatically expand access to formal financial services for both the banked and unbanked people."

Following approval from Bangladesh Bank, bKash was formed in the beginning of 2010. The system is fairly simple. Customers have to visit their nearest bKash agent to start services; a list of agents is given on bkash.com. Hundreds of bKash agents are active in the country and many more are joining everyday, said Quadir.

The agent assists customers to open a bKash mobile wallet, which will be the customer's account, explains the chief executive officer. Customers will be able to receive electronic money in their bKash accounts through salaries, loans, remittance, and other disbursement, and they can cash the electronic money at any of the hundreds of cash-out bKash assigned agents.

The bKash mobile wallet, a VISA technology platform that is fully encrypted to ensure the most secure transactions, will be the customer account into which money can be deposited or withdrawn from.

In case a customer cannot afford a mobile phone, they will be able to receive money using the bKash service. Registered bKash users will be able to generate a limited size token valid for limited days, which will have a voucher number, password and recipients' photo ID, he said. After receiving the voucher number and password, an un-phoned customer will be able to withdraw the fund at a registered bKash agent after showing the photo ID. In that way, bKash takes financial services beyond network barriers, he added.

Bangladesh is home to 160 million people where less than 15% of the population is formally 'banked'. Reasons for poor penetration of the banking sector are partly due to Bangladesh's weak infrastructure, high agrarian population, density and widespread poverty, Quadir said.

While these factors have created a fertile environment for microfinance, it gives no incentives to the formal banks to venture outside the large cities, he said. "As such, the poor and rural populations rarely encounter the formal banking sector, which bKash will address."

bKash is using a Visa's Fundamo platform technology, which has been deployed in 40 countries around the world.

"At the moment, we are working in conjunction with Robi only, but we are talking to other operators and we expect that soon, they will join the service so that their mobile users can reach the bKash service."

In the next 5 years, the vision of bKash is a Bangladesh where common people do not have to worry about sending or receiving money to and from their loved ones. "A poor person does not have to require a fancy bank account to prove his worth and he can be a part of the economy via a technology that he can afford."

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