Tanvir A Mishuk Courtesy
“We innovate products and digital solutions to provide hassle-free services to include people from all strata of society in the financial services through mobile financial services (MFS),” Tanvir A Mishuk, managing director of Nagad, told Dhaka Tribune’s Ibrahim Hossain Ovi in an interview.
Why do people choose Nagad?
The process of opening a bank account is very complex for an individual. It takes time. But the aim of mobile financial services (MFS) is to ensure hassle-free banking services to the unbanked population within a shorter span of time.
However, we still found the process of opening an account in MFS time-consuming and lengthy.
We have tried to resolve the issues of time and physical presence and have partnered with mobile operators to simplify the account-opening process.
Now opening an account is only a matter of a few seconds as we have launched the Porichoy app, through which one can open an account with Nagad just in a minute.
It previously took five days to verify the national identification card (NID) of an MFS account-holder, but now it takes only a minute using the Porichoy app.
Security is a challenge for others, but we have managed it and you will hear very few complaints about Nagad's security breaches from its customers.
On the other hand, we have reduced cashing out charge to Tk9.99 for every Tk1,000 cash out.
Tell us about the cash out charge Nagad recently introduced.
No doubt that cash-out charge is another bottleneck for the local mobile financial industry. We are quite satisfied and have already slashed it to single-digit, to Tk9.99 for every Tk1,000 cash out.
Since the beginning of the MFS operations in the country, customers have been paying Tk20 as the charge for cashing out Tk1,000. We thought it was unjustified and made it possible to bring it down to half.
Not only the cash-out charges, but using Nagad service is also cheaper than any other operator. Our intra-network transaction is free but it is chargeable in case of other carriers.
The Covid-19 badly affected the businesses but it is quite different for the MFS industry. How was your business?
The pandemic adversely affected the country’s businesses as the supply chain was severely disrupted due lockdown.
However, our transaction was better during the countrywide shutdown as people preferred contactless transactions and shopped through online payment gateways.
We have witnessed a sharp rise in account opening as well.
To facilitate our clients, from the beginning of the Covid-19, Nagad introduced the lowest-ever cash-out charge for the entrepreneurs at Tk6 for Tk1, 000 cash-out. These initiatives helped us to get initial success.
As a new MFS provider, what kinds of challenges are you facing?
We found a monopoly in the market from the very beginning. Big players are dominating the market and trying to retain their dominance unfairly. I will request the regulator to ensure a level playing field for all.
As a technology service, it is easy to ensure interoperability. But the big fish is pulling the strings behind closed doors.
In the telecom field, the regulator has introduced significant market power rules that ensure the rights of the smaller players. I think the same needs to be introduced in the MFS segment to ensure competition.
Equal opportunity and level playing field are critical for taking the MFS to mass people and the stakeholders should consider it with importance.
What is Nagad’s achievement in one and half years since its inception? What is your future plan?
With the support of our customers, we have been happy so far. But the ultimate satisfaction will come when Nagad will be able to financially include every adult in the country within the next few years.
Within a short period, the company has established itself as one of the fastest-growing MFS carriers in the world. We already have more than 2.50 crore happy customers with around 30% market share.
We will be happy if we can keep up this pace and can attain a 50% market share by 2021.
In order to achieve the target, we need to get a licence for setting up a digital bank to enhance financial inclusion.
I can assure that if the central bank gives the permission, we can launch the digital banking service within a few months and customers will enjoy more digital services from their homes at a much lower cost than currently levied.
What is the secret of Nagad’s success within a shorter period?
It all depends on how you bring a product to the market. We had identified the problems in the market before commencing our operations with the solutions in our hand. We were bold and innovative with products like digital KYC. We introduced a service where customers can get money even if they do not have a Nagad account. To me, the secret recipe to our success is innovation through a sustainable business model. We are also offering a huge interest on the customer's deposits in the account.