Opening a bank account was never this easy. With the launch of Asaan Mobile Account (AMA) scheme, you just have to dial *2262# from your mobile phone, choose one of the 13 branchless banking banks and four telecoms, and feed your CNIC credentials. You are all set to receive and transfer cash, pay your bills, make online purchases, and so on in less than two minutes.

The customer verification and screening are done in real-time in a minute using the National Database & Registration Authority data. Your mobile number becomes your bank account identity. You can access and operate your account remotely using a simple mobile phone with no internet connection as the scheme runs on USSD (Unstructured Supplementary Service Data) protocol.

For any serious endeavour aimed at boosting financial inclusion of the unbanked population — particularly women, low-income segments of the population and those living in far-flung areas — and with nearly 60 per cent of mobile phone owners in Pakistan using simple phones, the USSD technology is the best candidate for connecting the last mile customers with financial institutions through a digital payment system.

The World Bank initiative was soft launched by the State Bank of Pakistan (SBP) in collaboration with the Pakistan Telecom Authority (PTA) in December last year. The technological infrastructure and support for the AMA project is provided by Virtual Remittance Gateway (VRG), a mobile financial services platform for digital banking and financial inclusion.

While only 18pc conventional bank accounts are held by women, about 40pc of the Asaan Mobile Account users are females

VRG is Pakistan’s first SBP/PTA licensed PSO/PSP (Payment System Operator & Payment System Provider), as well as the only TPSP (Third Party Service Provider) providing digital financial services to the people. It acts as an intermediary and operates a USSD aggregator for around 196 million telco subscribers for routing, switching, processing and clearing financial and nonfinancial transactions among all the branchless and retail banking players.

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VRG was given the mandate to develop and operate the AMA scheme to include 50pc of the country’s adult population of Pakistan by 2024 to increase financial inclusion from the existing 20pc to 45pc of the adult population. So far, according to VRG’s CEO Muhammad Salman Ali, some 5.7m new accounts have been opened. The ratio of AMA women accounts at 40pc is more than double the normal female-held accounts of 18pc of 160m total bank accounts in the country.

“The fact that nearly 80m adults in Pakistan do not have bank accounts — with almost a similar number without access to the internet — simply means that they’re excluded from the formal financial system. They cannot use financial services offered by banks, insurance companies and so on,” Mr Ali told this correspondent.

“This is especially true for women, residents of remote areas, those who cannot meet the documentation requirements of banks and do not have access to bank branches. This is despite the introduction and encouragement of branchless mobile banking over the last few years, as the vast majority of mobile phone owners can neither afford smartphones nor can they access the internet. The financial exclusion of such a big population is the key reason we have such a large cash and informal economy.”

Mr Ali argues that with only 20pc of the population financially included, Pakistan needs favourable payment ecosystems to foster greater financial inclusion.

“Financial inclusion has always been a challenge because of myriad reasons like the lack of technological infrastructure, limited digital channels, low awareness of financial services and their benefits and the absence of interoperability among payment schemes and services. Remote areas are still suffering from the last mile problem, which can be tackled only by giving people access to these services at their fingertips.”

The AMA scheme is launched as a solution to this problem by reaching out to the last mile customers to open 65m new bank accounts by 2024. “This scheme is especially for less-educated people who do not have access to financial services. It also provides interoperability of the branchless infrastructure of banks, telecom companies and their 600,000 agents across Pakistan.

“The operating model works on the concept of many-to-many as any telecom subscriber can now open a bank account with any bank by providing credentials. Moreover, the agent interoperability will provide digital financial footprints to financial institutions not having agents now, opening the market and opportunities for customers to avail financial services.

“Besides receiving and transferring cash, the AMA accounts will also be used for digital disbursement of small loans and relief payments, buy micro insurance, pay for healthcare services and so on,” says Mr Ali.

The accounts have a deposit ceiling of Rs200,000 and a transaction limit of Rs25,000 a day. The objective of the scheme is to improve the accessibility of new customers for account opening, drive usage of digital financial services through an increased number of account-to-account transactions across mobile networks and provide digital access to a range of quality financial services.

This will facilitate the poor and marginalised sections of society towards adopting digital payments and also transform banks to shift their focus from ‘Over-the-Counter’ services to branchless banking accounts, says Mr Ali.

At the macro level, the scheme will assist the authorities in documenting the economy and enable digitisation and seamless disbursement of existing government-to-person initiatives. It will promote remittance inflows, digitisation of loans, issuance of micro insurance and mutual funds and would be effective in emergency funds disbursement at the time of need.

“I foresee person-to-person payments thriving. Everyday payments for buying goods at stores to services at local businesses will become more efficient with AMA.

Merchants will be able to receive payment for their goods and services digitally and also pay for supplies using the same channel. It will also make the cash-on-delivery process cash-lite, reducing the cost of cash handling, security and fraud issues,” the VRG CEO insists.

Published in Dawn, The Business and Finance Weekly, October 3rd, 2022