Bangladesh, lush and green, is crossed by 700 rivers and is famous for its tigers and mangrove forests. When it comes to the digital economy, Bangladesh is one of the top locations where freelancers are based. In fact, the most recent Online Labour Index, a project of the U.K.-based Oxford Internet Institute, shows Bangladesh behind only India in terms of numbers of freelance workers. While India is home to more than 25 percent of the workers, Bangladesh has some 17 percent (third is Pakistan, with 13 percent). Together, the three countries are home to more than half of all online gig workers.
To learn what U.S.-based marketplaces need to know about expanding their reach to Bangladesh, we interviewed Dhaka-based Mohammad Khairuzzaman, Country Director and Head of Operations for Transfast, operator of Transpay.
Q. What do you see in Bangladesh in terms of the way recipients (for example, freelancers working on a marketplace like Upwork, or sellers doing business on an e-commerce marketplace like Amazon) prefer to receive funds from U.S. companies?
Freelancers are self-employed, so they are always looking for a secure platform where they earn more, by minimum transfer fees and maximum Forex gain. They like to have options to receive funds both as cash pickup and account deposit, or what we call “Local Bank Transfers.” In addition, freelancers appreciate our customer support, and the ability to track the status of their payments.
Q. Is there a clear preference for having funds sent directly to the recipient’s bank account via Local Bank Transfers? What about cash pickup? Cards and e-wallets?
Yes, having funds sent directly to a bank account is preferred, but cash pickup and wallet credit is a preference of freelancers in rural areas who do not have good branch banking facilities.
Q. Is there a significant unbanked population? Is cash pickup something that recipients seek out?
In Bangladesh, one-third of the population is financially excluded from the banking practice. But for freelancers, almost all of them have their own bank accounts as companies prefer to send Local Bank Transfers. If cash pickup can be available to all banks with good exchange rates and low fees, it might be welcomed by a good portion of the freelancing population from all parts of the country.
Q. Do you see any growth opportunities when it comes to how Bangladeshis prefer to get paid?
Bangladesh introduced an e-wallet system around 2011, and right now we have a growing population of e-wallet users from all parts of the country. Major banks already launched their mobile wallet products, such as Bkash from Brac Bank, Rocket from Dutch Bangla Bank and M Cash from Islami Bank. This will be a great opportunity for freelancers to be paid via these mobile wallet channels.
Q. Would you characterize the local currency as stable or volatile?
Bangladesh has failed to cool down the volatility in the foreign exchange market despite an injection of more than $2.3 billion in fiscal 2017-18. The turmoil in the foreign exchange market will exacerbate in the months to come, on the back of higher import payments and lower export earnings. The large import bill has already put an adverse impact on foreign exchange reserves.
Import payments have significantly increased in recent months and the latest trend of letters of credit openings indicates that it will shoot further upwards. The reason for this is that our country has started to import liquefied natural gas to enable the plants to run uninterruptedly at full steam. The price of petroleum products in the global market has also been increasing, which has piled on more pressure.
The large amount of dollars injected by the Central Bank into the market has failed to cheer banks, as they are still hungry for more greenbacks to meet their growing demand for import payments. Given this situation, the local currency is volatile against the U.S. dollar.
Q. Is getting paid in local currency a preference of recipients in Bangladesh?
Yes, getting paid in the local currency is the preference.
Q. What are the regulatory hurdles involved in sending funds to Bangladesh?
As of now there are no barriers for Transpay clients, because Transfast has a legal entity here. Transfast has its International Remittance License and adheres to policies and local regulations from the Central Bank.
Q. Who are our key payout partners?
We have multiple banks and non-governmental organizations in our network. Key payout partners include Dutch Bangla Bank, Brac Bank, Bank Asia, Southeast Bank and Islami Bank Bangladesh.
Q. Are we expanding the network in 2019? What are the services levels do we offer in terms of speed and cost?
Yes, we are extending our network in Bangladesh. We are offering our customers the best service with fast transfer (cash pickup available in ten minutes, Local Bank Transfers with same-day credit and bank credit within 48 hours maximum depending on the business hour) with zero cost for recipients. We offer 24/7 customer support for any recipient queries.