The Ministry of Social Welfare is considering allowing mobile financial service provider Upay to disburse social safety allowances ‘despite the company’s limited agent network across the country’.

The Department of Social Services has opposed this move, fearing that beneficiaries will face difficulties in withdrawing their allowances due to Upay’s insufficient number of agents.

This concern has been formally communicated to the ministry in a letter.

Currently, bKash and Nagad, with their extensive agent networks, are solely responsible for disbursing social safety net allowances among beneficiaries.

Different regions are divided between these two MFS providers for allowance distribution. The department believes that assigning any area to Upay would lead to problems for beneficiaries trying to withdraw their money.

Under the Ministry of Social Welfare, the Department of Social Services disburses various social safety allowances. Since January 14, 2021, these allowances have been distributed through the country’s two leading MFS providers, bKash and Nagad. Officials from the social services department say bKash and Nagad have been successfully fulfilling their respective duties. However, the ministry recently instructed the department to also include Upay in this task.

Following this request, the Department of Social Services analysed Upay's features last year. Their investigation revealed that Upay, being new in the market, does not have enough agents nationwide.

Consequently, assigning areas to Upay for disbursements would cause difficulties for beneficiaries in withdrawing their allowances.

Despite Upay’s slightly lower cash-out charge, it does not make any difference at the beneficiary level because the cash-out charge is subsidised by the government and the MFS providers. As a result, beneficiaries do not incur any cash-out charges from any operator.

Considering these factors, Dr Abu Saleh Mostafa Kamal, Director General of the Department of Social Services, wrote in an official letter to the ministry, "Even though Upay’s general cash-out charge is somewhat lower than bKash and Nagad, it does not apply to beneficiaries under social safety programs. Additionally, the number of Upay’s agent points across the country is inadequate."

Upay’s statement

 Upay provides MFS services to the customers at minimum charges, says an official.

Besides, the beneficiaries of government’s social safety net programs can also withdraw the allowance free of charge through UCB’s ATM booths spread across the country.

Upay spokesperson said, “UCB Fintech Company Limited (upay) is a hundred percent owned subsidiary of United Commercial Bank PLC. Although upay was officially launched in 2021, this platform has been able to gain the trust and confidence of customers and agents within a very short period of time and upay currently has more than 1,50,000 agents across the country, which is increasing day by day."

Upay has been performing the task of disbursing money among the beneficiaries of a number of ministries of the government with reputation for a long time.

"No beneficiary has ever complained about our service, which speaks of the highest standard and security that upay maintains while providing MFS services. Since its inception, upay has been working to create a competitive environment in this sector, resulting in better MFS services at a lower cost for ordinary people of the country," said the Spokesperson.