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Back when coronavirus-related lockdowns hit the country in March, some observers of digital economy had predicted that the force majeure events would super-charge growth in ICT-enabled services. With the latest SBP data on branchless banking (BB) now available for the Apr-Jun quarter, at least the question pertaining to growth in mobile wallets during the so-called corona quarter can be objectively assessed.

Surprisingly, there was no breakout growth for m-wallets in the peak pandemic-cum-lockdown period in the Apr-Jun quarter. For instance, the number of active accounts – which have previously been defined by SBP as accounts that were opened in past 180 days or had performed at least one transaction in past 180 days – stood at 26.7 million as of June end, lower 4 percent (or short 1 million) compared to March end. The argument that lockdowns hurt customer outreach doesn't stand; plenty of digital mediums exist.

Making the BB segment performance look less convincing in this period of opportunity is also the fact that active accounts’ share in total accounts had dropped to 51 percent in the Apr-Jun quarter, down from 57 percent in the Jan-Mar quarter. Declining account activity, especially at a time when usage of virtual service should have been growing leaps and bounds, looks bad on the service providers in that they failed to capitalize on a golden opportunity. One fails to recall new services offered by providers lately.

In addition, the number of customer transactions in the corona quarter also came in 2.5 percent lower at 397 million, as compared to the pre-crisis quarter ended March. As a result, average daily transactions by customers fell slightly to 4.37 million. Some consolation accrued when the value of customer transactions in the crisis period stood at Rs1.04 trillion, about 10 percent higher over preceding quarter.

But this growth in value – which is driven more by plain-vanilla fund transfers between m-wallets and banks, and G2P (government to person) payments during the crisis – can hardly qualify as extraordinary. Nor does it signify an expanded scope of services offered and customer usage thereof.

Encouragingly, m-wallets continued their domination of the transaction mix compared to over-the-counter (OTC) alternative. During the quarter, m-wallets accounted for 93 percent of customer transactions by volume (Jan-Mar: 89%) and 92 percent of customer transactions by value (Jan-Mar: 86%). However, this growing use of m-wallets is also on account of the fact that lockdowns affected OTC channel. The data show that number of active BB agents stood at 182,189 at June end, 6 percent lower than March end.

If the yardstick to measure performance during a pandemic is to shield revenues and ensure business continuity, then the BB segment has done well in the first wave of the coronavirus earlier this summer. However, if the benchmark for a digital-facing business is to capitalize on such once-in-a-long-time opportunity that the lockdown presented, the Apr-Jun stats of BB segment have served to disappoint.