The potential and Limitations of a Public Mobile Payment Service: did Bangladesh Electronic Money Transfer System Make a difference in "Unbanked" Communities?

Bangladesh Post Office introduced the Electronic Money Transfer System (EMTS), a mobile payment support service similar to Kenya’s M-PESA, to helps citizens send money orders quickly and safely. EMTS data show dramatic increase in electronic money order issuance, amount remitted, and amount of commission that outnumbered corresponding figures of ordinary money orders. Also EMTS shortened the average money order delivery time from several days to a day and reported a very high delivery rate. However, EMTS concentrated on urban areas rather than rural areas. Electronic money orders within urban communities accounted for about 90 percent of total issuance, amount remitted, and commission. EMTS was not successful in making a difference in “unbanked” communities. Also EMTS encountered commercial competitors and thus its issuance and amount of remittance have dramatically declined since 2012. The rising and ebbing of EMTS provide valuable lessons on potential and limitations of public mobile payment services.