QR code payments hit all-time high in 2021

Digital payments penetrate Bhutan’s interiors

QR code merchants in the country reach 69,505 as mobile and internet banking recorded transaction of Nu 37.22mn

Digital transactions and payments have not only pierced into the heart of the country but are witnessing drastic increases, with Quick Response (QR) code payments emerging as a popular and convenient method of mobile banking transactions during the first quarter of 2023. This is underlined in the Royal Monetary Authority’s (RMA) monthly statistics bulletin report. According to the report, Pemagatshel dzongkhag (district) saw an increase of 69.84% in QR code merchant registrations, surpassing the 19 registered merchants in the same quarter of 2022. Sarpang and Lhuntse dzongkhags followed closely with 67.61% and 61.54% increases, respectively. However, Thimphu dzongkhag continued to have the highest number of QR code issuances.

While the rise in QR code payments is attributed to the contactless, and user-friendly nature, people and businessman also opine that the rise in the number of smart phone users in the above districts, awareness and internet services would have played a major role.

Though data on mobile penetration and the number of people with smart phones in different parts of the country cannot be obtained, the National Statistical Bureau’s (NSB) Bhutan Living Standard Survey-2022, says that almost all households (99.60%) in the country have internet connection. Of those, 96.0% have mobile internet connection, while less than 3.0% have other connections such as broadband, leased line and data card/wi-fi dongle.

“It is definite that the number of smart phone users in Pemagatshel increased after the Covid 19 pandemic. Firstly, students had to buy the phones and though people may not have the means to buy expensive Smart phones, there are a variety that you can select based on your means,” Tsewang, a businessman and resident of Pemagatshel said. According to him, people also get very good phones from children and relatives working outside Bhutan. “Pemagatshel’s internet connectivity has improved and using QR code payments is very convenient as you do not need to go to the bank or an ATM to withdraw money,” he said.

Tsewang further added that Pemagatshel has a lot of truckers, due to mines and minerals in the district. “They are a group that keeps moving from here to Nganglam. Using QR payments would be very convenient for them.”

 Karma, a shopkeeper in Pemagatshel said that with more people using QR codes, it has become a norm for all people. “I can’t remember when everything started to change. But suddenly I realized that people were not coming to my shop because I did not have the QR facility,” he said. Karma says that now, he hardly handles cash. “So, when people come to my shop, they have to use digital payment. It is a circle. Before I had to install a QR facility and now people have to use digital payment,” he said, adding that digital payment is also very safe. According to Karma, people have understood the importance, convenience and advantages of digital buying and selling. “It is difficult to get cash now. If we need some, we have to go to the Bank. Physical money has suddenly disappeared,” he said. Karma further noted that people have also understood the different ways in which Smart phones can be used. “It is not just to make calls and for we-chat, telegram and other modes of communication. People now know that Smart phones can be used for other purposes, too,” he added.    

He further underlined that with the increasing adoption of QR code payments, users can make transactions swiftly and securely without the need for physical contact, aligning with the ongoing efforts to maintain health and safety protocols.

Meanwhile, the RMA’s report says that during the first quarter of 2023, QR code payments recorded a total of Nu 20.78 mn transactions, with a combined value of Nu 19.76 bn. This accounted for approximately 55.83% of mobile banking transactions in terms of volume and 15.71% in terms of value.

 Comparing these figures to the same quarter of the previous year, there was a remarkable increase of 120.73% in volume and 126.80% in value.

Further, in line with the growing popularity of QR code payments, the banks on boarded 4,849 new QR code merchants during the first quarter of 2023. This takes the total number of QR code merchants in the country to 69,505, reflecting a significant increase of 7.50% compared to the total merchant registrations in the fourth quarter of 2022.

The report also states that the significant growth in QR code payments and the corresponding increase in merchant registrations reflect the growing trust and acceptance of digital payment solutions in Bhutan.

With the continuous advancement of digital infrastructure and the ongoing efforts to promote financial inclusion, it is expected that QR code payments will continue to play a crucial role in shaping the future of mobile banking transactions in the country.

As Bhutan moves towards a more digitally driven economy, the convenience and efficiency offered by QR code payments are likely to contribute to the nation’s economic growth while providing users with a seamless and secure payment experience.

Meanwhile, the report also states that mobile and internet banking recorded Nu 37.22mn transactions, representing a 9.3% increase compared to the previous year of same period. This transaction amounted to Nu 125.77 bn, indicating a substantial growth of 38.1%

Accordingly, Wallets also experienced a notable increase with Nu 2.14 mn transactions, marking a significant growth to 75%. This transaction amounted to Nu 559.58mn, reflecting a 38.3% increase.

Meanwhile, in the domestic payment Gateway there were 934.89 thousand transactions, indicating a notable growth pf 43.4%.  The total value of these transaction amounted to Nu 521.69mn, in the domestic payment transaction.

Apart from the domestic payment transaction, the first quarter of this year also saw notable increase in the volume and value of regional payment transaction compared to the same quarter of the previous year.

Under RuPay acquirer, there were 0.29 thousand transactions, reflecting a significant growth of 314.3%. The earnings from these transactions amounted to INR 1.20 million, marking a substantial increase of 492.5%.

In the case of Rupay Issuer, there were 12.16 thousand transactions, indicating an increase of 293.8%. The spending associated with this transaction amounted to INR 60 million, showing a growth of 417.8%.

Tshering Pelden from Thimphu