Gazi Yar Mohammed, EVP & Head of Innovation, ONE Bank Ltd.

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No Cash? No Problem, OK.

OK Wallet: The new e-wallet for a cashless society

ONE bank has launched OK Wallet. What inspired your bank to start this digital financial service?
Our payment ecosystem is getting ready for digital financial services. Presently, 3 crore people are using mobile wallets. The number of users is growing every day. Around TK 1000 crores worth of transactions are taking place per day in Mobile Financial Services (MFS) and digital wallets combined. Our central bank is very supportive towards financial inclusion and taking different positive initiatives to support MFS providers and banks. Digital finance and financial inclusion have several benefits to financial services users, digital financial service providers, business entities and the economy, such as increasing access to finance among mass consumers, reducing the cost of financial intermediation for banks and MFS providers.

Initially, mobile financial service was used mainly for P2P money transfer, now it is turning out to be a big tool for payment. In our country, we have 2 million retailers in the market and we have only 42,000 Point of Sale (POS) Terminal machines for these retailers. One of the biggest reasons digital wallet is thriving is retailers don’t need any POS machines and would rather accept payment by mobile phone.

E-wallet is thriving globally. According to World Payment Report, e-wallet will encapsulate 51% of the payment method in Asia Pacific region. Paytm in India garnered 30 crore e-wallet users in a couple of years, which is way bigger than all credit card users combined in the Indian market. WeChat Pay and Alipay made the Chinese payment market cashless and similar changes have started in Hong Kong, Thailand and Malaysia. Malaysia has 31 e-wallet providers in a short span of time. Digital wallet will get significant momentum in our country in the next 2-3 years.

How big is the payment market in Bangladesh? Do you think there is enough room for other MFS or E-wallet players?
Our overall payment market size is $360 billion. Formal business payments represent around $150 billion, individual payment market size is $170 billion and government payment market is $42 billion. Only 12% of transactions in value of our entire payment market is captured by digital payments and banking channels while the rest of the transaction is settled in cash. To tap into this market, more e-wallets can easily be accommodated.

What are the value propositions of OK wallet? What would you say sets ONE Bank’s digital wallet apart from its competitors?
OK Wallet caters to a wide range of services including cash deposit and withdrawal, in-store shopping by QR code, utility bill payment, money transfer, mobile recharge, inward remittance, insurance premium, salary disbursement and e-commerce payment. Smartphone users can use the wallet by downloading the OK wallet app from Google Play Store and Apple Store. Feature phone users can avail the services by dialing *269# on their mobile keypads.

Users can open OK Wallet at any ONE Bank branch or the agent points. Users can top-up the wallet by cash or tagging ONE Bank account. Hence, a customer who does not a have bank account will also be served by this wallet. Moreover, we are working to link other bank accounts and cards to OK Wallet. This offers more convenience and freedom to users. Users will then enjoy cash-in facility at branches, agent points or they can add money by simply tagging any bank account or card. Similarly, users can cash-out at branches, agent points and via OBL ATM. So we offer more flexibility in terms of movement of money through our e-wallet. We already teamed up a good number of merchants and institutions, so our users can pay at outlets by scanning OK QR code. We are also working to build a bridge between our wallet and online to offline (O2O) commerce. We will offer online deals, lifestyle services and ride sharing services directly from our wallet.

We are already working on B2B payments and collaborating with some large FMCG brands to digitize B2B payments in their supply chain. We are also working to integrate retail and SME banking facility through the OK Wallet. According to UNCDF report, we have 13 lakh micro merchants (Mudir Dokan) who contribute to $18 billion market turnover in this FMCG trade segment and this market is almost cash driven. Digital wallet can play a big role here. Moreover, these micro merchants don’t get credit facility due to lack of authentic transactions records. Only 8% of these segments got bank loans. Once these micro merchants can be bought under our e-wallet scheme, it will be easier for banks to extend credit facility to these micro enterprises based on wallet transaction history. E-wallet can open up huge opportunities for SME sector and SME Division of Banks.

Are you only focusing on a Dhaka based market? Can we expect expansion to other cities in the future?
OK Wallet is already present throughout Bangladesh via the strong network of ONE Bank Limited’s branches. We are covering all districts via Distributor-Agent channel. We have a good number of distributors and we are also teaming up with two mobile network operators to make access easy for our customers at their partner outlets. Moreover, customers can register for OK Wallet by visiting a ONE Bank branch on any working day.

What is the most challenging part of making the economy “less cash” driven?
Our B2B payment market is around $150 billion, while only 3% of the total B2B payment transactions are made digitally covering banking and MFS channel. The rest of the transaction is still made in cash. I believe, the market is huge and the proper implementation of digital wallet can help FMCG brands, distributors, micro merchants and retailers to come under the umbrella of well-connected digital payment systems. The key challenge is to bring micro merchants, retailers, business entities and different institutions into a digital payment ecosystem. To achieve a “cashless or less cash” driven economy, we have to get onboard all players in this ecosystem.

It is quite encouraging to note that our internet penetration and smartphone usage are quite high and they are on the rise. 90 million people in our country have internet access and 50 million people use a smartphone. So, I have a strong conviction that the digital wallet and overall digital payment system will successfully overcome the challenges.

What do you think OK Wallet will achieve in terms of being a disruptive mobile wallet?
We are focusing on the retail payment market and business payment market. Banks have better options to be more disruptive in terms of value proposition since we have fully functional retail and SME banking services already in place. We are trying to tap into, both bank customers and unbanked customers through OK wallet. Once inter-bank fund transfers through NPSB becomes live and MFS wallet interoperability becomes ready, these wallets will turn into a one stop payment tool; consumers and merchants will reap huge benefits out of this digital payment ecosystem. We have around four to five digital wallets in the market, I believe with timely strategy and execution, we can ensure good traction and progress.

Can you please tell us a little about your tenure at ONE Bank Limited.
I joined ONE Bank back in July, 2013. Since the beginning of my journey at this bank, I tried to build a winning team as Head of Retail Banking, to revamp the retail banking business. Our management has been committed in helping retail business flourish. We have built value pillars for retail banking, such as: Retail Finance Center, Collections Team, Cards Center, Direct Sales Team and Contact Centers. We rolled out retail branch concept to focus intensely on retail banking in the key neighborhood areas. We turned around a good number of retail branches in terms of business performance in a very short span. Our retail deposits have grown by 200% and retail loan portfolio by 400% in the last 5 years and ensured that 70% of the loans in retail portfolio are home loans. Our cards business has also caught up. We reduced NPL (Non Performing Loans) substantially and now the retail NPL is approximately 2%. I have taken up the new role of Head of Innovation in March, 2018 and started working to launch digital wallet around the same time. We launched OK Wallet on October 30, 2018 and are working to bring new value propositions in OK wallet to make it an everyday app. We are building an ecosystem which blend with our agents, distributors, merchants, strategic partners and value propositions.

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