New Deal: Digital Banking Dominates Financial Transactions

Different types of domestic payment transactions in the country (Pic: RMA)



The Department of Payment and Settlement System’s Quarterly Payment System Report Q3, 2021 (July-September),  which is under Royal Monetary Authority (RMA), shows an increase of 116.91 percent by volume and 121.76 percent by value in domestic payments as compared to the previous years’ report.

Domestic paymentsrecorded a total of 44.83-million (m)comprising of intra and interbank domestic transactions worth Nu 206.37-billion (b)during the 3rd quarter this year.  

The domestic payments are inclusive of payment transaction like Paper-Cheques, Mobile & Internet Banking, Bhutan QR Code, Payment Gateway, Wallets, Electronic Fund Transfer, Cards and Point of Sale (PoS).

Unlike the old manual transaction, the 21st century digital banking has made work very easy for both the bank employees and their clients, while millions are being transacted in just a click of a button.

With the increase in the digital banking in the country, many people choose mobile and internet banking over Automated Teller Machines (ATMs) which are more fast and convenient.

“ATM services are very convenient for us as we don’t have to go to bank to withdraw the cash unlike before, but the online payment module is even better as we don’t have to go searching for ATMs,” says 31-year-old Tshering, a civil servant in Thimphu.

Tshering Dorji, 25, also shares the same thought. “We have to go in search for the ATM machine where as the mobile and internet banking is fast and more convenient.”

The report also states that there is an increase of mobile & internet banking by volume of 76.41 percent and by value of 168.59 percent which has increased as compared to the quarterly payment system report Q2, 2021 (April-June).

More so with the digitalization of the global financial systems, the Covid-19 pandemic has made financial institutes to gear up with more convenient and flexible services for their clients – mobile banking applications.

An official from the financial institution said, “The pandemic has made us work hard to know our capacity to give full satisfaction to our clients. I am glad that many people are enjoying our digitalization services though we take some complaints as a way forward for us.”

The card payments refer to cash withdrawal/transactions from ATM and PoS terminals in the country using domestic ATM cards. In the third quarter 2021, a total of 0.95-mtransactions, worth Nu 3.72 B,were transacted.

Unlike other payment instruments, the report shows decreasing trend for card payments in terms of volume the percentage it has decreased by 37.32 percent and the value has decreased by 26.74 percent compared to the same quarter last year.

In addition, a decrease of 11.87 percent by volume and 6.86 percent by value compared to the previous quarter (Q2, 2021) was also observed.

Chief of Digital Banking Department with Bank of Bhutan Limited, Kritika Pradhan, said, “We have removed ten numbers of ATMs starting from July 31st 2021 where 106 are functional in the country.”

Asked on the reason for the removal of the ATMs, she adds that it is to ensure better uptime of the existing ATMs as the ATMs cannot be upgraded to modern day security standards.

Despite minor hiccups, it is fast becoming a trend that most clients of financial institutions prefer mobile and digital banking services.

A taxi driver from Thimphu said, “Sometimes, we don’t get payment from our passengers due to technical issues, and we can’t force them to pay as many don’t carry hard cash these days.”

Another taxi driver shares stated that during this time of Covid-19 pandemic, it is convenient to use digital banking. However, he said it inconveniences them when the system is down for the whole day as they have to opt for digital transactions most of the time.

Another client from one of the financial institution said, “With many similar apps, it is confusing where I feel that they can make one app instead of many which have similar functions.”

An official from financial institution said, “We are considering the complaints from our clients as the digitalization services depends on the technical issues which we are trying our best to upgrade the system to a better one.”

Meanwhile, in the 3rd Quarter of 2021, the report states, that there were significant decline in ATM transactions in Thimphu and Chukha Dzongkhags, a slight decline in Samtse, Paro and Wangdue Phodrang Dzongkhags compared to the same quarter last year.

The report further states that in comparison to the previous quarter (Q2, 2021) and this quarter (Q3, 2021); the ATM transactions have decreased slightly.

However, the report states that the volume and the value of mobile and internet banking has slightly increased as compare to Quartile 2, 2021 report from 31.64-m transactions from 27.27-m transaction and Nu 93.16-b from Nu 79.28-b.

On the flip side, Cards-ATMs and PoS has decreased from 1.07-m transaction to 0.95-m transaction and Nu 3.99-b to Nu 3.72-b.