bKash, the market leader for mobile money transfer in Bangladesh, has grown rapidly since its launch in 2011. The service now has roughly 17 million users conducting 70 million transactions per day and is arguably as successful as Kenya’s, much heralded, M-Pesa. bKash is market disruption at its best, transforming the lives of millions of unbanked Bangladeshis who are now able to send/receive money to their families in rural locations across the country. Marketers in developed nations can draw inspiration from the rapid adoption of bKash as they look to adapt to disruption in their own markets.
Bangladesh is usually associated with catastrophic natural disasters that continue to set the country back. However, during the past few years the country has experienced a period of economic growth (GDP grew approximately 6% per year between 2010-2014, according to The World Bank) fueled, in part, by a burgeoning garment industry. One of the most crowded countries on the planet – the population is approaching 170 million* while the land area is roughly the size of New York state and Rhode Island combined – approximately 70% of the population live in rural areas and the majority have no access to financial services, according to bKash.com. Mobile phones, as seen in other developing nations, have been transformative. According to the company, approximately 68% of the population now own a phone, a trend that has led to Bangladesh first being a pioneer in microcredit, via Grameen Bank, and now a leader in mobile payments, via bKash.
I recently had the opportunity to visit Bangladesh and observe bKash, not only in the bustling port city of Chittagong, but also in the surrounding rural areas. Here are four observations that immediately struck me and can be considered “success factors” for the launch of other mobile payments solutions:
1. Meets a Real Customer Need
In Bangladesh, people come to the cities for work and need to send cash home to their families in the village or elsewhere. Using bKash, money is transferred via phone, for a small per transaction fee, and the cash is obtained at a local merchant thereby providing a money transfer service that was previously unavailable.
2. Broad Acceptance
bKash is everywhere! What struck me was the ubiquity of the service. Thousands of small merchants offer bKash – many of them not much more than small snack bars – and no matter where you are, you can get access to cash even in the most remote places. Stores are often open until after 10pm providing a level of convenience that can’t be matched by a local bank.
3. Strong Brand Presence
bKash’s bright pink signage stands out amidst the lush green tones of rural Bangladesh making it easy to identify. In the city, bKash billboards dominate intersections with ads highlighting the value proposition through customer user stories – an approach that is also used on bkash.com via the use of videos and unique “graphic stories.” Everyone knows about bKash whether they use it or not.
4. Clear Mission
bKash has a great story to tell and a clear mission to “widen the net of financial inclusion” by “providing financial services that are convenient, affordable and reliable.” In 2014 the Bill and Melinda Gates Foundation became a minority investor after initially investing in the BRAC Group, bKash’s parent company.
Bangladeshis still rely heavily on cash but bKash is increasingly being accepted at merchant locations (currently 5,000 nationwide per the company) and to pay for hospital services, taxis and plane tickets. In June, the company was offering 20% cash back for using bKash at select merchant locations, for a limited period, as a special promotion to celebrate the Muslim holiday, Eid-ul-Fitre, suggesting that the company sees a real opportunity in expanding from person-to-person (P2P) to mobile payments at the point-of-sale.
Financial services innovation is likely to come from developing countries, like Bangladesh, where there is a clear and compelling customer or societal need to be met and with limited legacy systems in place. In order to gain traction in the way that bKash has done, payments innovators in developed countries should consider how they score against the “success factors” that have propelled bKash to being one of the fastest growing mobile payments solutions in the world.
* CIA World Fact Book, July 2015 estimate
Andrew Davidson is SVP Comperemedia at Mintel. He is a multi-channel marketing and payments expert with over 20 years of marketing research experience. Andrew is regularly called upon to provide analysis for leading media publications worldwide and is also a key speaker at Card Forum and other high profile international industry events.
