The government-managed money transfer through postal department is losing its market share fast amidst aggressive action by private kiosks mushrooming every nook and cranny, sources said.
With the fast loss of market, the government services through EMTS even run the risk of getting marginalized at a time when the private players "play foul" on the money bazaar, people familiar with the situation told the FE.
They feel the urgency of an immediate rescue plan to revitalise the official channel to play its effective role by way of intervening into any bad intent of the private players.
"We are losing our market share to the private operators as we could not reach the doorstep of people where private operators reached successfully," a deputy postmaster- general of Bangladesh Post Office (BPO) told the FE, on condition that he should not be named.
"But in case of large-amount transactions, BPO is still on top of their choice," he added.
"Electronic money transfer is growing fast in the country. In such a situation, government's intervention to keep the market stable is very much important," he said.
"So to keep activity of EMTS going, the authority has to adopt new policies, including appointment of agents and wide broadcasting," he suggested.
The government introduced electronic money transfer across the country in 2010, aiming to provide the fastest money transfers to both urban and rural areas.
After six months' operation of the government's electronic money-transfer system (EMTS), leading NGO BRAC sponsored bKash.
After bKash, some 19 players-mostly private commercial banks-have entered into the market till to date.
According to official data, despite charging the lowest service fees on transactions, EMTS is losing out to the costly private operators mainly because of poor propaganda, managerial failure and bureaucratic tangle, the DPMG said.
EMTS by the post office charges Tk 10 on each one-thousand-taka transaction whereas the private operators charge up to Tk 20 against sending the same amount.
Cash transactions through the EMTS have dropped by nearly 80 per cent in last three years. EMTS transacted Tk 5.13 billion, with 0.50 million transactions in July-May period of the current financial year (FY).
The figure was nearly Tk 23 billion through 4.9 million of transactions in FY 2011-12, the data showed.
However, Managing Director of BRAC Bank Ltd, which operates aKash, said better services and aggressive marketing helped his bank grave major share of the market cake.
"Whatever fees we charge is not a big concern to the people as they are getting better services from us. People can depend on us as bKash is now in every corner of the country," he said.
"Our customers now do not need to carry cash. Simply a mobile phone is enough for them as they can save money in their account and encash it anytime from the nearby bKash agents."
However, secretary of the post and telecommunications ministry Md Faijur Rahman Chowdhury said a plan of mass expansion of EMTS to grassroots level is underway through which BPO expects to regain its lost position soon.
A proposal for appointing agents across the country is under scrutiny. "We hope after appointing agents, EMTS would revolutionize country's financial transaction system once again, as its service charges are much lower than those of the private operators."
According to Bangladesh Bank (BB) data, the amount of daily transactions through mobile-money transfer services has reached nearly Tk 3.0 billion.
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