Impact of Covid-19 Pandemic on MFS sector of

Bangladesh Using Porters Five Forces

Threat of New
Entrants (Low)

During the Covid-19 there is little to no chance of new entrants gaining access to MFS market of Bangladesh due to
requirements such as modern tech infrastructure, extensive legal processes and barriers set by the regulatory authorities
such as Bangladesh Bank though demand for such services will rise considerably

Rivalry among existing

competitors (Moderate to High)

Rivalry among existing competitors (bKash, Rocket, Ipay, Ok Wallet, Nagad and Gpay) will rise significantly due to
people now focused on ecommerce buying due to pandemic and MFS has given consumers convenience to get
products without leaving their homes.
Bangladesh Bank has also made MFS cheaper by removing transaction charges from purchase of medicines and other
essential commodities using MFS P2P transfer and through debit or credit cards. Also, no charges for MFS cash-out of
BDT 1,000 daily at a time. The current charges are BDT 20 for each withdrawal amounting to BDT 1,000. The
monthly ceiling of MFS P2P transactions has been raised from BDT 75,000 to BDT 200,000 (“Is it the right time for
wallet interoperability in Bangladesh?”, thefinancialexpress.com.bd, April 26,2020)

Threat of substitute products (Low)

There is little to no chance of getting a new product that will appease the people because going cashless requires time
and cooperation from the government, also there are major security concerns by the consumers because of many
security breach incidents that have been observed for the past decade for example the Bangladesh Bank incident.
 Bargaining power of suppliers
(Moderate to High)

The bargaining power of the suppliers will rise due to people preferring purchasing items without going out due to
the pandemic and it is convenient. So, MFS service provides depending on their customer base will have a higher
bargaining power for example bKash has a higher popularity and usage

Bargaining power of
buyers (Low)

The bargaining power of buyers will decrease due to high demand for such services during pandemic. For example -
the Payment Systems Department of Bangladesh Bank has directed readymade garment factories to pay salaries to
workers and employees through MFS accounts. In response, bKash, Rocket, and Nagad have already registered 1.92
million RMG workers. The market share of RMG workers is 970,000 for bKash, 550,000 for Rocket, and 400,000
for Nagad out of total 1,920,000. We understand that bKash continued to register more than 50,000 new wallets of
RMG workers every day. Almost 70 per cent of these wallets are registered at its digital registration agent points.
(“Is it the right time for wallet interoperability in Bangladesh?”, thefinancialexpress.com.bd, April 26,2020)