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bKash Updates: Bird Game, City Bank Digital Loan, Insurance, and bKash Super-app Followup

bKash continues to add new features to the bKash App gradually unfolding its potential scope and ambition. A number of recent updates suggest that bKash has gone past that imaginary ‘all about payment’ line. Of course, payment remains the key piece that holds everything else together but the motion has been set to make bKash more than a payment company. Money is at the center of economic operation. bKash has the advantage of being a vehicle for transactions. The company is now on a race to bring the world to it. There is a significant difference between the two. In the past, bKash used to go to ecommerce companies and brands and integrate the bKash payment option on their platforms. This option remains active and will continue to be a strong part of bKash in years to come. However, the company is increasingly moving towards a direction where it wants to bring various products and services to its platform so that bKash users don’t have to leave the bKash app to buy products or services. 

Bird Game: Most recently bKash has launched a game called Bird Game that you can play within the bKash app. It is not only that bKash created the game, but the company is also actively pushing and encouraging users to play the game by offering various rewards.  

This is a critical move because it validates our assumption that bKash aims to be much more than a payment player. Why does bKash need its users to play games in the bKash app? This simply can be a marketing ploy but in reality, it runs deeper. The most plausible one is that bKash wants bKash users to use the app more often and for a longer period of time. It has two immediate consequences: 1) people will use the bKash app for other purposes as well such as payment 2) bKash can lure more brands by showing the number that people do spend a disproportionately long time within bKash app and thus it is meaningful for brands to integrate their products and services within bKash app. 

City Bank launches digital loan: City Bank has launched a collateral-free digital loan in collaboration with bKash and Ant Financial, whereby select bKash users can request and receive loans of up to taka 10,000 instantly through bKash app and as well as repay the loan from their bKash account. The product currently is in pilot phase.

1/ The loan comes with a three-month term and can be repaid three equal monthly installments (EMI) auto-deducted from the user’s bKash account on fixed due dates. The receivers can repay the EMI amount earlier than the due date and save money in lower interest costs. Users will be notified through SMS and in-app notification before every EMI due date.

3/ Availing the loan is quite simple, eligible bKash users can click the ‘Loan’ icon on the bKash app and enter the desired loan amount, accept the loan terms and conditions, and give consent to share their KYC information, available with bKash, with City Bank. After successfully entering the bKash PIN, the loan will be instantly disbursed to the user’s bKash account. 

4/ The behavior of the loan receiver will be monitored and will eventually affect the future ability to access loans. Ant Financial, an affiliate of Alibaba Group and an investor in bKash, will be the technology partner undertaking credit assessment on potential borrowers for this project.

Insight: This is a pretty big deal for multiple reasons. For City Bank, the gains are pretty straight forward. To my reading, however, in the long-term, this move is going to bring huge advantage for bKash. There are going to be meaningful second-order consequences of this development. For now, it is going to do three things for bKash: 1) it will work as a strong moat since many users will prefer to stay with bKash if they can avail loans when they need one. This is meaningful because competition in the MFS space has been heating up. 2) taking bKash’s relationship with its users to the next level. bKash is no longer viewed as a payment service, it is way more than that. 3) Improving bKash’s overall usage. The people who will be taking loans through bKash will necessarily be using the loan through bKash improving bKash’s overall business. The move will affect bKash’s standing in the digital payment space and help multiply the bKash’s overall transaction. 

Milvik on bKash app: bKash has integrated insurance into its app, which means bKash app users now can avail Milvik insurance packages without leaving the bKash app and can make the premium payment through bKash. This update, however, has nothing new to it. It is yet another validation that bKash is increasingly going to push for more products and services integration within the bKash app. 

bKash superapp followup

bKash has aggressively been investing in tech and pushing new features. The common thread that connects all these initiatives and features is the company’s growing desire to cement its position not only in the payment space but also to move up across value chains where it operates. This leads us to bKash as a super-app discussion. From bKash bKash Adds Train Ticket, bKash And SuperApp

“If you consider a Super app, there are certain conditions that enable a digital platform to pursue such an ambition. One, a large enough user base that uses your product daily and you have a direct relationship with your users - demand aggregation. Two, an underlying infrastructure that connects one service with others – the necessary condition for selling one more service using the same infrastructure and at zero marginal cost. Three, decreasing acquisition cost and a multi-sided market with certain network effects and inherent incentives for every party who participates. bKash fulfills all these conditions.

From bKash Integrates bdtickets, bKash SuperApp follow-up

With the decision to integrate bdtickets.com into its app, bKash has made an important decision that it wants to open up its platform for other service providers. 

Instead of launching each service by itself, which Shohoz, Pathao, Sheba, and others have done, bKash will work with other service providers such as bdtickets and integrate them into its platform. This is by far the easiest route to building a platform. 

In that way, bdtickets does all the hard work of acquiring transportation service providers, a gargantuan task in itself, and bKash just leverages its platform power and demand aggregation power to attract service providers like bdtickets. The benefits for bdtickets here is that it gets a set ready users who are already using bKash.

Again from bKash Integrates bdtickets, bKash SuperApp follow-up

One thing has changed between the time I wrote about bKash becoming a super-app and bKash integrating bdtickets into its platform, my speculation has come true that bKash wants to be a super-app, which is the only logical move for bKash in the existing regulatory environment for digital businesses. However, I’m not sure how far bKash will push this move in the coming years. 

Digital services providers have many reasons to join bKash platform, one being the users. For now, my hunch is that bKash will not take any commission on sales from the digital service providers. Instead, bKash will be happy to make the cut for the payment processing for now, which it does everywhere else, and eventually, when it firmly establishes itself as a platform for digital services, the company will think about how to go about the relationship with these service providers outside of the payment. 

If bKash does not act as a marketplace and does not charge commission, at least in the short-term, it solves two short term challenges: 1) incentive problem for the service providers because service providers have nothing to lose by joining bKash platform rather it can gain a huge customer base 2) and regulatory challenges for bKash since it will simply be working as a financial service company regardless of form it operates. There is enough room for regulatory maneuvering if bKash maintains this approach. 

For bKash the new questions will be: 1) will bKash only have one service provider in each category such as in ticketing there will be only bdtickets.com or there will be multiple service providers and as an open platform bKash will allow anyone to participate? 

From the customers’ perspective, a single service provider, no matter how curated the service is, does not make sense. If bKash offers exclusivity to the service providers, it does not make sense as a powerful enough platform. Similarly, if it allows more than one service provider, it creates conflict. bKash will have to do some navigating here. 

2) how does bKash ensure service quality for third party providers? bKash can well ensure quality for bKash payment service but for bdtickets.com how bKash is going to ensure the customer experience is going to be an important aspect. 

Questions for the participating service providers such as bdtickets.com, however, are much more pressing. 

Digital platforms are largely aggregators. While what we see is that companies like bdtickets aggregate services, in bdtickets case, ticketing. In reality, the most important aggregation they do is demand – they aggregate demand and control it making the original service providers such as bus owners come to the platform. 

To explain, if bdtickets effectively establishes itself as the most trusted platform for ticketing then most customers will go to bdtickets platform to buy tickets online instead of going to the bus counters forcing bus owners to sell their tickets on bdtickets website and enabling bdtickets to collect rent from the bus owners. This is the exact scenario that applies to bdtickets and bKash relationships as well. 

People will eventually go to bKash for bus tickets instead of bdtickets website or app forcing bdtickets to comply with bKash. While this relationship is not this black and white, it is not much different either. 

Demand is the ultimate power in the digital market. If you can control demand, you can control supply. This poses a challenge for both the service providers – how they deal with bKash, and as well for bKash – how it builds a platform that maximizes value for everyone participating in it while conserving its own value. Because platforms only win when participants in the platform win as well. 

Mohammad Ruhul Kader is a Dhaka-based entrepreneur and writer. He founded Future Startup, a digital publication covering the startup and technology scene in Dhaka with an ambition to transform Bangladesh through entrepreneurship and innovation. He writes about internet business, strategy, technology, and society. He is the author of Rethinking Failure. His writings have been published in almost all major national dailies in Bangladesh including DT, FE, etc. Prior to FS, he worked for a local conglomerate where he helped start a social enterprise. Ruhul is a 2022 winner of Emergent Ventures, a fellowship and grant program from the Mercatus Center at George Mason University. He can be reached at ruhul@futurestartup.com

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