Rehman Ali, a 68-year-old retired primary school teacher in a quiet village in the northwestern district of Bogora, begins his day with a routine he has perfected over decades.

He methodically prepares tea, reads the newspaper, then walks around the area, visits the school premises or strolls through the market.

However, today it has a different purpose. He is going to the local post office to send a money order to his daughter in Dhaka, as he has done countless times before. But when he goes there today, something feels different — the once bustling post office was inhabited by only a few people.

The comfort of tradition

For Rehman, sending a money order is more than just a transaction – it’s a ritual.

He carefully fills out the form, carefully counts the notes, and hands it to the postmaster with a knowing nod.

“I trust this method,” he says nostalgically. “It’s reliable. I know my daughter will get the money safely.”

In contrast, Ayman Siddiq, a 25-year-old entrepreneur, runs a handicraft business from her small office in Dhaka. He is busy with orders and payments. Time is of the essence for this.

“I hated waiting at the post office,” he recalls. “But now, thanks to mobile financial services, I can send and receive money in seconds. It’s a game changer.”

A generation gap

Rehman and Ayman’s contrasting experiences highlight the racial divide in Bangladesh’s financial landscape. While the older generation retains familiarity with money orders, the younger generation has increasingly embraced the convenience of digital payments.

According to the Bangladesh Bureau of Statistics, the peak of money orders came a decade ago in 2011-12, when 2,218 transactions were made, totaling Rs 625.92 crore. These figures illustrate the significant reliance on this traditional method at the time.

But by 2015-16, the number dropped by almost two-thirds as only 796 money orders worth Rs 197.91 crore were dispatched. This represents the initial stage of digital adoption.

Fast forward a few years, the decline became even more pronounced: by 2019-20, transactions fell by 62.19 percent to 301 with a value of Rs 114.34 crore.

In July-December of 2023-24, the previous financial year, only 99 money orders were booked, involving Rs 22.76 crore, indicating an almost complete shift to digital modes.

Also reflecting the growing reliance on digital financial transactions is the significant growth of the mobile financial service (MFS) sector in Bangladesh over the years. The number of cash-out transactions and the amount involved has steadily increased.

In January 2019, the total was Rs 13,282 crore. According to Bangladesh Bank data, it reached Rs 42,230 crore by March 2024. This reflects high frequency and large individual transaction values.

Bangladesh’s remarkable transition from traditional methods of money transfer through internet banking to digital payments is also commendable. Over the years, the number of internet banking users has grown steadily, reaching over 8.5 million in April.

At the same time, the volume and value of internet banking transactions have grown significantly, with the total transaction amount crossing Rs 97,100 crore in April, up significantly from Rs 3,790 crore in December 2018.

Saima Haq Badisha, research director of the South Asian Network on Economic Modeling and professor of economics at Dhaka University, said that technologies are more advanced today, enabling technology adoption for both senders and receivers.

Digital systems have increased convenience as there is no need to drive home or face traffic to get services. Covid-19 was also a big push towards adoption of digital services as people needed to access everything without going out.

Talking about the challenges, Prof. Badisha highlighted that the entire system of cashless economy depends on electricity and internet, which are not always available in rural areas.

“Lack of digital and financial literacy is another barrier as the entire process is self-administered. For example, sharing your PIN code can harm consumers as they can be duped, but many People do this because of lack of awareness.”

The digital money transfer system has an impact on the economy because the more money is transacted, the more money spreads and increases in circulation. In addition, people, especially women, who are excluded from the market system can be included through services, which promote an inclusive economy.

Postmaster General of Metropolitan Circle in Dhaka Farid Ahmad said that the Directorate of Posts has an Electronic Money Transfer Service (EMTS) at a very low cost.

“But this facility should be strengthened at the Union level to make it more efficient by including the rural parts of the country. Notably, sub-post offices in the districts effectively provide EMTS.”

Accepting change

Sharifa Oshi, a third year student of the university, shared her experience.

“Managing finances was always a problem. I remember my parents sending money orders to my grandparents before festivals. It was a slow process.”

“Nowadays, I never use money orders. With bKash and Nagad, I can pay tuition, buy books, and split bills with friends instantly. Even I I take tuitions from students who take lessons privately.”

Oshi’s story echoes the millions of young Bangladeshis who have embraced digital wallets. These platforms offer unparalleled convenience – no long waits, no need for physical currency, and the ability to handle transactions anytime, anywhere.

Mohammad Zahidul Islam, Vice President and Head of Media and Communication, Nigad Limited, opined that digital money transfer has made maximum use of technological advancements in the last 13 to 14 years.

“It now takes a fraction of a second to send money. If we can ensure the benefits of digital banking, rural communities will easily adapt to the process.”

He further said that awareness should be created to make the rural people more aware of these facilities and systems.

The struggle to adapt

However, not everyone finds the transition easy.

Yasmin Ara, 55, struggles with technology-based service. “I’ve always trusted the post office,” she admits. “This digital system feels complicated and confusing. I once sent money to the wrong number, and getting it back was a nightmare.”

His experience is not unique. Many older Bangladeshis find digital payments intimidating and concerned about security. They also miss out on the personal interaction and reassurance that comes with traditional methods.

Yasmin, with the help of her tech-savvy younger son, recently started making payments through digital transactions. “It was easier than I thought,” he admits, though still wary of abandoning his trusty money orders entirely.

As Bangladesh continues to innovate, the future of financial transactions looks increasingly digital. The decline in money orders is not just a statistic but a reflection of a broader shift towards a more integrated, efficient, and inclusive financial ecosystem.

For Ayman, Oshie, and millions like them, digital payments are a testament to growth and convenience. For Rehman and Yasmeen, they represent a difficult but inevitable transition.

The journey from money orders to digital payments is a story of adaptability, flexibility and the promise of a better, more efficient future. This change is echoed in the bustling city and quiet corners of rural villages.

Ali Ahmed, Chief Commercial Officer, bKash, added: “If the timely guidance from the regulator continues with the support of stakeholders, strengthening the country’s digital financial ecosystem with continued innovation in the MFS sector. It won’t be difficult.”

There are 22.6 crore MFS accounts in the country, of which 56.21 per cent are held by people living in rural areas. The share of women among rural MFS users is 57.07%.

These numbers show that people living in rural areas are ahead of the urban population in terms of holding MFS accounts. Such financial inclusion, particularly for women, through MFS has multiple impacts on rural communities.

At its heart, it’s a story of two generations, each navigating the changing tides of technology in their own way. As Bangladesh steps boldly into the digital age, this transformation promises to bring greater convenience and financial inclusion to every corner of the country.

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