Branchless banking witnesses paltry decline in transactions

Staff Reporter

The branchless banking sector has witnessed a decline of transactions in the third quarter of 2014 sliding by 6 percent to reach at 66.8 million from 71.2 million in previous quarter. However, the value of transactions grew steadily by 15 percent to reach at Rs. 375.9 billion from Rs. 326.1 billion in the previous quarter, State Bank of Pakistan (SBP) said.

The decline in number of transactions was witnessed in all major transactions type i.e. agent liquidity transactions, OTC and m-wallet transactions. However, the major dip was seen in m-wallets which went down by 23 percent or 2.8 million transactions. The significant decline in the mwallet transaction was mainly due to lower G2P payments and simultaneously lower withdrawals.

Similarly, the agent liquidity and OTC transactions went down by 3 percent and 4 percent respectively. The decline in number of transactions was witnessed amongst all market players, except MobiCash and Timepey. The increase in Timepey was solely due to a new disbursement program for internally displaced persons (IDPs) whereas the increase in Mobicash was at the back of growth in P2P transactions.

The number of

transactions

for MobiCash went up by 13 percent whereas for TimePey, it increased by 11 percent. Among the early players, the major share in number of transactions was lost by UBL-Omni which saw its number of transactions reduced 18 percent or by 3 million whereas EasyPaisa's number of transactions went down by 2 percent.

Similarly among new players, HBL-Express and UPaisa also saw their transactions fall by 37 percent and 20 percent respectively.

In the third quarter of 2014, the value of transactions grew steadily by 15 percent to reach at Rs. 375.9 billion from Rs. 326.1 billion in the previous quarter.

The value of transactions in two categories i.e. agent liquidity and OTC transactions went up quite significantly whereas m-wallet transactions declined significantly by 26 percent. The OTC and agent liquidity transactions remained dominant in value of overall BB transactions with a share of 47 percent each, whereas in terms of overall customer transactions, the OTC transactions constituted significant share of 87 percent.

While three players saw their value of transactions go down, five have seen it go up. Value of transactions for TimePey and MobiCash went up by 71 percent and 63 percent respectively. Similarly, EasyPaisa was steady in its growth trend for value of transactions with a QoQ increase of 11 percent to maintain its position as a market leader in terms of both number and value of transactions. In terms of value, MobiCash saw its transaction value climb by Rs. 24.4 billion which is the largest growth by any player during the quarter.

This increase was mainly driven by agent liquidity transactions which constituted Rs. 18 billion whereas Rs 5 billion was contributed by P2P transfer. The rise in Timepey was mainly due to the payment of Rs 3.1 billion to internally displaced persons (IDPs) and increase in the agent liquidity transfers.

Second largest BB player in terms of number and value of transactions, UBL-Omni showed a declining trend in value of transactions with an overall dip of 5 percent or Rs. 3.9 billion compared to last quarter.

This decline was mainly due to the less G2P payments to BISP beneficiaries during the quarter compared to last quarter, Rs. 3.5 billion or 41 percent less amount was disbursed using m-wallets for G2P payments through UBL-Omni.

The major reason for this decline was slight delay in tranche received for BISP payment which led to lesser disbursement during early months of the quarter. This also had a negative impact on value of transactions for cash withdrawal using m-wallets, which went down by 31 percent. The situation is, however, likely to improve in the next quarter.