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21 July 2024

Upay to disburse social safety allowances

Messenger Online

Published: 17:52, 9 July 2024

Upay to disburse social safety allowances

Photo: Collected

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."

Messenger/Nishat