mobile finance

How bKash Revolutionized Bangladesh's Payment Industry


In the last decade, bKash has revolutionized Bangladesh's payment landscape. This fintech had a dramatic effect on Bangladesh, bringing the unbanked into the formal economy, speeding up and simplifying the process of sending money from urban to rural areas, and even helping the country's central bank monitor inflation levels. Now, the South-Asia country could become a cashless reality sooner than we think.

Putting innovation and financial inclusion first

As underlined by experts, bKash is leading the Bangladeshi mobile finance revolution. From corporates to office cleaners, the service has made its presence felt in the big cities of Dhaka and Chittagong, as well as in the most remote rural areas.

Basically, bKash offers financial services through basic mobile phones. Considering there are more than 100 million mobile phone owners in Bangladesh - far more than the number of banked individuals - mobile phones provide a link between financial services companies and consumers that brick-and-mortar branches have failed to establish.

But unlike in other countries where the interest in mobile banking has been driven by the telecommunications sector, in Bangladesh, the running is being done by mainstream banks. bKash is a subsidiary of Bangladesh-based BRAC Bank, a private sector lender focusing on small and medium-sized enterprises that is part of BRAC, the largest non-governmental development organization in the world.

After only four years of starting operations, bKash users have grown to 21.2 million, which is about 12.5% of the country's population. More than 1 billion bKash transactions were completed in 2015 alone. On average, 100 million bKash transactions are carried out per month, and one million new customers are added in the same period of time.

How does it work?

bKash has been a pioneer in introducing digital financial services in Bangladesh. The platform offers a wide range of bill payment services, including utility bills, internet bills, and mobile phone recharges.

This convenience has simplified financial transactions for users. It has expanded its services to enable users to make payments at various merchants, allowing for cashless transactions at shops, restaurants, and other retail outlets.

Moreover, bKash has collaborated with international partners to facilitate cross-border remittances, providing a streamlined and cost-effective way for Bangladeshi expatriates to send money home. bKash has also introduced innovative digital nano loans and savings accounts through MFS, promoting financial inclusion and allowing users to access credit and savings services.

Bangladesh is going cashless

bKash's huge success hinges upon a network of agents across the country who act as a human version of an ATM. These agents offer cash-in and cash-out services to bKash users in convenience stores all over Bangladesh. Distribution companies that collaborate with bKash give agents electronic money to carry out these services. Agents act as a repository of electronic money while the transactions are carried out through a user's mobile phone.

Today, the term 'bKash' has entered the Bengali lexicon as a word simply meaning 'to transfer money'. When pronounced quickly, it sounds like the word 'bikasa', meaning arising, development, and blooming.

The fintech is the forerunner of Bangladesh Bank (the country's central bank) plan to catapult the economy into the digital age. The goal is for at least 75% of all retail transactions to be settled via mobile and digital technologies by 2027 — and preferably 100%. The ambitious program is built around Bangla QR, the uniform digital payment system devised by Bangladesh Bank's team.

In a less-developed country like Bangladesh, where most of the population remains unbanked, there is still significant scope for improvement in mobile financial services. Through bKash, even rural migrants living in cities are now able to transfer money back home safely and instantaneously.