Becoming sophisticated: Branchless banking accounts grow 10%

SBP says industry likely to be competitive with entry of new players.

Our Correspondent October 25, 2013
The number of agents offering branchless banking services rose above 93,800. CREATIVE COMMON

KARACHI: Branchless banking accounts grew 10% in the April-June quarter this year and reached 2.6 million, says the 8th issue of the State Bank of Pakistan’s Branchless Banking Newsletter for the second quarter of calendar year 2013.

In the quarter, branchless banking services providers performed 44.8 million transactions valuing Rs173 billion, a 9% growth in volume and 1% growth in value. On average, agents performed 497,333 transactions per day with an average transaction size of Rs3,870.

The number of agents offering branchless banking services rose above 93,800. However, the growth was also supported by the growing trend of shared agents.

According to the analysis provided in the newsletter, 83% of transactions have been done through over-the-counter (OTC) model, whereas only 12% transactions were performed through m-wallets.

OTC means transactions from one CNIC to another CNIC that do not involve mobile wallet as opposed to more sophisticated channels that entail greater know-your-customer (KYC) requirements.

Fund transfers continued to have a major share in volume and value of OTC transactions, followed by utility bill payments. Both types of transactions not only constituted a major share in branchless banking, but also represented prime categories for industry-wide growth and earnings.

The newsletter says that the branchless banking industry is expected to become competitive with the entry of new players. In the last two quarters, three new players – Mobicash, Timepey and HBL Express – have initiated branchless banking operations whereas U-Microfinance Bank commenced branchless banking under the brand name U-Paisa in August.

Further expansion in the market is also likely in the coming quarters, since a few other banks, which are currently in the pilot phase, are preparing to launch branchless banking activities.

Published in The Express Tribune, October 26th, 2013.

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