Mobile phone-based money transfer soon in Bangladesh

Dhaka: Bangladesh plans to use cell phone technology for remittance transfer in a faster manner and lower cost, officials and reports said here on Tuesday.

Money transfer through mobile/ Photo credit: Slashphone

"It's going to revolutionise the remittance delivery system. If introduced, it will enable expatriate Bangladeshis to send their cash back home from any corner of the world," the Financial Express newspaper quoted Expatriates Welfare and Overseas Employment Minister Mosharraf Hussain as saying.

He said the proposed system would make the transfer process faster and drastically cut down costs as Bangladesh became one of the world's top 10 remittance recipient nations in the developing world in 2008.

Officials said under the system, the recipient would get notified by SMS, and then will punch the code he gets on his SMS into a specially enabled automated teller machine (ATM) to withdraw the cash.

Officials said the World Bank already agreed to support the planned remittance transfer process with initial financial and technical assistance while Bangladesh Bank said the country's top cellular phone operator, Grameen Phone, sought its permission for mobile phone-based transfer.

Currently the global money transfer agencies charge, in cases, more than 20% on the remitted amounts as fees while Expatriate Welfare ministry officials said proposed system was likely to cut it down as low as one per cent of the principal amount.

Some 6.3 million Bangladeshi expatriates, mostly working in Middle Eastern countries, and others sent home $9 billion (Dh33.1 billion) last year, an amount that accounted for 11% of the GDP.

Bangladesh Bank recently estimated that only 57% of the annual remittance flowing into Bangladesh comes through official channel while the rest finding its way into the unofficial media.

"The use mobile phone will help boost remittance flow through the official channel bypassing the unofficial hundi system," the minister said.