Branchless banking: AMA scheme to play crucial role in reaching out to low-income segments

ISLAMABAD: The Asaan Mobile Account (AMA) scheme - developed under the national financial inclusion strategy will bring further ease in remote account opening under branchless banking and will play a crucial role in reaching out to the low-income segments that do not have access to the internet.

This was the crux of background discussions with various stakeholders.

Pakistan with a population of 220 million is the fifth-largest country in the world; however, around 40 percent of adult population are lacking access to banking services, which is a major hurdle to socio-economic development.

To extend banking facilities to such a large population, the government of Pakistan, the State Bank of Pakistan (SBP), and the Pakistan Telecommunication Authority (PTA) have introduced AMA scheme. The scheme would play a vital role in financial inclusion, digital payment, and documenting the informal economy.

Chairman PTA Major General Amir Azeem Bajwa (retd) said that this scheme will also play a pivotal role in women’s economic empowerment, thereby, improving their socio-economic status in the country.

He said that with significant population of Pakistan being unbanked, the AMA Scheme will go a long way, as ubiquitous financial services will now be available and accessible to a huge market of over 187 million biometrically verified SIMs and subscribers.

Ikram Sehgal, Chairman Pathfinder Group, while talking to Business Recorder said that this is a unique thing brought by Pakistani talent. It is unique in the world as except one country, no one has this scheme. India has this scheme but it does not have a real payment scheme with it. In Pakistan it is a full-fledged payment scheme and hence, a first globally, he added. With the AMA scheme the poor have the opportunity to own a home, the dream of 50 years now becoming a reality, he added.

The quality of the AMA is that the customers would be able to open and operate their accounts in the comfort of their homes at their simple mobile phone, without having to visit the branches, without internet, and with any of the participating branchless banking providers.

The AMA scheme could extend latest banking facilities in no time, which is secure and effective compared to cash. Anyone with a valid CNIC can open AMA in any participating bank using their mobile number. The scheme allows individuals to access AMA platform using a short code i.e. *2262# and make transactions, through their basic/smart mobile phone without the need for internet connectivity.

One have to follow the given steps to open an Asaan Mobile Bank Account: Dial *2262# to access AMA platform, choose “Register for Asaan Mobile Account (AMA)” from the menu, select your preferred bank from the given list, enter your CNIC number without dashes, enter CNIC issuance date listed on your Computerised National Identity Card (CNIC) at the bottom and select “Yes” to provide account authorisation. The bank after verifying customer credentials through verification call or One Time Password (OTP) will activate the account for the transactions.

The scheme has been developed through collaboration of the SBP, the Pakistan Telecommunication Authority (PTA), the National Database and Registration Authority (Nadra), 13 Branchless Banking (BB) providers, all cellular mobile operators (CMOs), and Virtual Remittance Gateway (VRG). For AMA, the branchless banking providers and cellular mobile operators are collaborating to deliver an interoperable platform, allowing any Pakistani to open account with a bank.

After the pilot project, VRG operated AMA scheme for four months and completed its successful soft launch under the monitoring of regulators (the SBP, the PTA).

As per the data, around 23 percent population is financially included, which is lowest in the region and one of the hurdles to economic growth. However, a scheme like AMA is envisaged transferring millions of un-banked to financial inclusion by providing digital payment at around 100 times lower rate compared to the current schemes run by telecom operators.

After reaching an apex, deploying new ATMs could be counterintuitive for financial inclusion as it serves banked customers at locations with access to bank branches. Remote areas still suffer from the last mile problem, which can only be solved by giving the population access to financial services at their fingertips.

Pakistan has one of the highest mobile penetration rates globally, and USSD (Unstructured Supplementary Service Data) is abundant. Even the cheapest $10 phone is capable of accessing USSD, which virtually removes all barriers to access the financial services.

The USSD is a technology being used every day, without even knowing what it is called or how it works. Every time *0000# short code is being dialed on phone to check balance or to subscribe a service, and USSD is being used. As it works on every phone; this makes it an ideal candidate to be used as a delivery channel for financial services.

Financial inclusion is always a challenge due to many reasons including lack of technological infrastructure, limited digital channels, awareness of financial services and its benefits and absence of interoperability among payment schemes and services. After the introduction of TPSP (Third Party Service Provider) regulation in 2016 jointly by SBP & PTA, a massive opportunity to promote financial services to masses has arrived. Using the unified USSD and interoperable payment platform, would enhance the reach to remote un-banked and the last mile access to financial services has been addressed making financial inclusion much easier.

Introduction of AMA scheme will play a vital role for financial inclusion where the digital finance service providers will join a unified USSD platform, allowing any person with a feature or smart mobile phone to open a digital transaction account swiftly through a USSD code “2262” from anywhere at any time.

Copyright Business Recorder, 2021