Royal Monetary Authority of Bhutan : Analysis of digital payments and inflows in times of Covid-19 (Dec 20, 2020 - Jan 01, 2021)

January 06, 2021

Press Release

Analysis of digital payments and inflows in times of Covid-19 (Dec 20, 2020 - Jan 01, 2021)

Covid-19 pandemic has made the Bhutanese more digitally savvy with an increasing number of users registering for contactless payments as a safe alternative to cash and widening the adoption of digital payments.

The in-depth daily transaction report of the two weeks of the second nationwide lockdown has revealed that 89.9% of the total volume of transactions were initiated through mobile banking apps, followed by QR code payments at 5.1%, and Mobile wallets at 2.2%. A total of 4,199 and 3,687 new users registered for the mobile banking and e-wallets, respectively, and as a result, the domestic financial transactions through these payment modes have grossed over Nu. 5.07 billion. Contrary to the digital payments, 1.9% of the total volume of transactions were initiated through the use of cash from the ATMs, reporting a decline of 58% due to the movement restrictions and concerns over the transmission of Covid-19. Similarly, RuPay acquiring in Bhutan reported Rs. 67,800 and Rs. 139,000 cash withdrawal in India.

In a virtual interview held with the newly registered users for mobile banking apps, the majority expressed their preference to continue using the banking apps even after the current pandemic, also agreeing that using these apps was easier and useful than they had initially perceived, and are encouraged to explore other forms of digital payments as a result of seamless experience, suggesting behavioral intention as the factor influencing the use of digital payments technology.

On the international inward remittances front, a total of USD 159.24 million inflows was recorded in 2020, an increase by 12.57%, as compared to 2019. Of the total inward remittance received through the formal channels, 80% were from Australia, followed by the United

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States (10%) and the Middle East (2.5%). In an effort to support and incentivize remittance during the pandemic, the RMA opened Australian Dollar account at the Reserve Bank of Australia, to minimize the exchange loss to the remitters through currency conversion while sending money.

Against the backdrop of rising digital payments adoption, several measures have been taken from the payments perspective-both supply- and demand-side interventions, which has contributed the uptake of digital banking and payment systems:

Factors driving Digital Payments

Going forward, the RMA and the Financial Service Providers will continue to focus on enhancing penetration and acceptance of digital payments through new product innovation, infrastructure, analytics and digital literacy, while incentivizing the flow of payments.

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