One of the more underrated countries in the world in terms of natural resources and cultural heritage has got to be Bangladesh. It’s known for being the home of the world’s largest river delta – formed by the brahmaputra, Ganges, and Meghna rivers. It also houses Asia’s longest uninterrupted sea beach, Cox’s Bazar beach, which goes as far as 150 kilometeres. All that plus its rich cultural heritage represented by numerous medieval archaeological sites including the UNESCO World Heritage site of Bagerhat showcasing its diverse history and cultural influences.
Photo by Faisal Photography on Unsplash
The Role of Remittance in its Economy
But aside from its glorious cultural references, Bangladesh is also known for being one of the largest diasporas in the world! As of writing, there are over 10 Million Bangladeshis across over 160 countries – particularly around the UAE, Malaysia, UK, and the USA. Because of this, Bangladesh is ranked the world’s 7th highest recipient of remittance with a nominal GDP of about US$ 341 billion in 2021, where about $22.1 Billion comes fom remittances alone.
Bangladesh’s economy has been growing consistently in the last decade, with an average annual growth rate of around 7% – one of the faster-growing economies in the world today. The country’s economy is diverse, with agriculture, manufacturing, and services being the primary sectors contributing to its GDP. The government has introduced various economic reforms and initiatives to further boost economic growth, mainly by promoting foreign investment and trade, investing in infrastructure development, including energy, transportation, and telecommunication, and enhancing the business climate.
The diaspora community plays an important role in the Bangladesh economy through their remittances, which are a crucial source of foreign exchange earnings and contribute to poverty reduction and economic growth in the country. Additionally, the Bangladesh government has been actively engaging with its diaspora community to promote trade, investment, and cultural exchange between Bangladesh and its diaspora.
Remittance is so crucial in the economy of Bangladesh that the government of Bangladesh has launched several initiatives and policies to encourage the inflow of remittances. These initiatives include reducing the cost of cross border payments, increasing the use of formal channels, providing incentives for remittance recipients, and even incentivising overseas Bangaleshi workers who send money back home by adding an extra 2.5% on their transfer.
Local Remittance Providers
Because remittance is too important for Bangladeshis, its government, and its economy – local financial service providers have been stepping up to the challenge to help aid the gaps in its current remittance economy. Here are a few names you’ll often hear across the remittance industry in Bangladesh.
BKash: Bkash is one of the biggest household names in Fintech you’ll come across in Bangladesh. Being the first-ever unicorn startup in the country, most Bangladeshi citizens rely on Bkash to send money across the country or even the world. Bkash was launched in 2011 and was hailed as one of the fastest growing fintech providers in the country (and around the world in 2013) reaching over 11 million accounts by the end of 2013, just 30 months after launch.
Ipay: Ipay is one of the emerging fintech providers in Bangladesh, showcasing its foresight on financial evolution. Ipay is a one-stop financial solution that allows you to manage your finances and your business at the same time. It enables SME owners to accept online, onsite, nd B2B payments through its platform while connecting them to a user base of over a million potential clients. It’s also the first PSP or Payment Service Provider in Bangladesh to be licensed by the Bangladesh bank. With this at its core, users can now pay their bills, send money, make purchases, invest their money, pay for insurance, education and much more.
GCC Remit – GCC is one of the bigger platforms, Bangladeshi citizens use more often. Founded in the UK, GCC lets Bangladeshis send money across borders and to their loved ones all over the world. Because it’s one of the more prominent platforms, it’s already managed to partner with a handful of brands, banks, and other financial institutions all over the world, making the process faster and easier for their end users.
IslamicEx – The Qatar-based remittance service provider doesn’t trail far behind, being one of the more trusted financial partners of many Bangladeshis. With religion, bigger a bigger factor for trust, IslamicEx’s unique focus on Islamic countries call for brand love and loyalty among its customers. While it provides a more basic set of services, return clients keep them competitive across the board.
Upay: One of the newe players in the market, Upay prides itself to be the more innovative, simple, and hip fintech providers in Bangladesh. Upay allows you to do more than the usual fintech functions of sending, receiving, requesting, and using money digitally. It goes as far as letting you pay for traffic fines, pay for visa fees, donate to your favorite organizations, and even get cash rewards just by registering.
Setting the Standard
With a wide diaspora of its citizens around the world, setting the standard has never been more important. Being a local remittance provider in Bangladesh means being more rigorous in meeting its citizens where they are while addressing industry gaps. Financial service providers focus on 3 main aspects:
Competitive service offerings: Local remittance providers in Bangladesh offer a range of services, including cash pick-up, bank transfers, mobile wallet transfers, and home delivery. They make sure to tailor fit their services to what is culturally appropriate in their country – allowing the adoption of technology to slowly grow instead of facing too much pushback. When you understand your market, your customers, and their culture – meeting them where they are becomes a top priority.
Technology innovation: With the increasing adoption of digital payments in Bangladesh, many local remittance providers are investing in technology and innovation to provide faster, cheaper, and more secure services. Being up-to-date on the latest technological developments is essential. People no longer look to financial service providers just to send and receive money – they look for providers that can do more – pay bills, make purchases, investments, and even platforms that give them a diverse experience.
Customer experience: Speaking of experience – customer experience is still king. It’s still a critical differentiator for local remittance providers. Understanding the factors that contribute to positive customer experiences, such as ease of use, convenience, and reliability, is important for gaining a competitive edge.
Imagine if you could have an app that is so vibrant and dynamic you wouldn’t need to switch apps so often. Think of Bangladesh’s #1 ride sharing platform – Panthao. Instead of it just being a purely ride sharing app, it now allows you to use it as a courier service, food delivery, and even a one-stop shop. But what if in that same app you can finally send money across the world. What if with every ride-related transaction you get to earn points that can turn into cashback rewads which can later on be added to your next money transfer? Then people would be more encouraged to use the app – which not only makes them more revenue but also supports a cleaner world providing an alternative to high carbon footprint emissions and helping reduce traffic in the major cities. All of that, doable just by upgrading to an API that lets to be as flexible as your imaginations. At Machnet, we aim to let those ideas come to life. Bangladesh has been on the countries to watch out for list for its apid economic growth and technological advances – we can’t wait to see what its next power move will be.