Digital transaction through mobile and Internet banking picks up significantly

Digital transaction through mobile and Internet banking picks up significantly

Around Nu 121bn worth of transactions through mobile and internet banking

Digital transaction through mobile and Internet banking has picked up significantly in the country over the year, these two systems dominate other forms of domestic payment transactions including paper-cheque instruments, Quick Respond (QR) code payments, electronic funds transfer, and Automatic machines (ATM), amongst others.

As per the Central Bank’s quarterly payment system report, the number of transactions has increased by almost 37.22mn transactions worth Nu 121.04bn were processed through the bank’s mobile banking app and internet banking.

It is an increase of 18.21% and 30.06% by volume and value respectively as compared to the same quarter of the previous year. The average value per transaction has increased from Nu 2,955 per transaction in the third quarter of 2021 to Nu 3,252 per transaction in the same quarter of 2022.

As of September, mobile banking apps and internet banking have around 37.22mn transactions worth Nu 121.04bn in the payment system report released by the Royal Monetary Authority (RMA). 

From July to September this year, around 37.38 thousand new users subscribed to the mobile banking apps making the active number of mobile banking subscribers around 464,194. 

For internet banking, about 159 new users have subscribed taking the total internet banking users to 29,627 as of the third quarter of 2022.

Similarly, QR code payments saw a total of 21.07mn transactions of value 18.64bn during the third quarter of 2022, equivalent to 56.61% of the mobile banking transactions in terms of volume and 15.40% in terms of value.

According to the payment system report of the RMA report, the increase is because of the launch of Bhutan QR by the RMA in July 2021 which enables interoperable use of common codes issued by member banks, which, further Bhutan OR code has helped during the pandemic as it limits in-person transactions making it less likely for the virus to spread to others through cash exchanges.

However, the domestic payments recorded a total of 61.44mn transactions comprising intra and interbank domestic transactions worth Nu 210.14bn.  This is an increase of 37.53% by volume and 2.02% by value as compared to the 2021 third-quarter payment system report.

The increase in domestic payments is mainly attributed to an increase in the transactions of point of sale (PoS), wallets, and QR code payments. The PoS transactions saw an increase of 160% by volume and 1157.80% by value amounting to Nu 19.80mn. 

Similarly, the wallets transaction saw an increase of 149.83% by volume and 104.52% by value amounting to Nu 254.34mn, followed by the QR Code payments with an increase of 97.955 by volume and 86.585 by value amounting to Nu 8.65bn. 

In addition, amongst the domestic payments, mobile and internet banking made the highest transaction of 37,21mn worth Nu 121bn, followed by paper cheques with 116 thousand transactions worth Nu 45.80mn and QR code payments with 21.07mn transactions worth Nu 18.64mn, followed by electronic fund transfer with 74 thousand worth Nu 21.22mn. 

According to the report, mobile banking and QR code payments are one channel, it is segregated because it is independently integrated with separate settlement accounts. “The share percentage of QR payments is increasing higher than the other channels including mobile banking over the years.”  

Meanwhile, regional payments saw an overall increase of 222.62% by volume and 199.97% by value and similarly, international payments saw an overall increase of 25.09% by volume and 41.79% by value.   

The increase in the regional payments and international payments is attributed to an increase in RuPay issuing transactions, which, the report states that there were no RuPay acquiring transactions recorded in the third quarter of 2022.

In addition, the increase in international payments is also attributed to the SWIFT-Inflow and SWIFT-Outflow transactions that are carried out at the bank level, without including the RMA’s transactions.

The report states that regional payments include RuPay card transactions through the ATM and PoS terminals in India and Bhutan and International payments contain the SWIFT and International Payment Gateway (IPG) transactions made from the banks.

 During the third quarter of 2022, a total of 6,988 regional payments amounting to Nu 26.47mn were transacted. “However, there were no acquiring transactions recorded.”

Meanwhile, the international payments recorded 13,286 transactions of value 321.47mn, an increase of 25.09% by volume and 41.79% by value as compared to the same quarter of the previous year and the IPG recorded 1,541 transactions while the SWIFT recorded a total of 11,475 transactions, according to the report.

The payment system report of RMA is data on the total transactions made through various digital payment channels operated by the RMA and the 6 banks at the domestic, regional (India) and international levels.

Sherab Dorji from Thimphu