Card Payments Show Mixed Trends in Bhutan's 1st Quarter of 2023

Increased ATM Transactions and PoS Recovery, while Cheque Payments Remain Popular
In the first quarter of 2023, Bhutan witnessed diverse trends in card payments, with a significant increase in ATM transactions, a recovery in Point of Sale (PoS) activities, and the steady popularity of cheque payments.
According to the RMA’s report, cardholders in Bhutan embraced the convenience of cash withdrawals and transactions from ATM terminals. In this quarter alone, a staggering 583.82 thousand transactions worth Nu. 3.05 billion were processed using domestic ATM cards. This growth of 58.3% indicates a rising preference for card-based financial interactions, particularly due to the limitations of in-person transactions during the previous quarter's lockdown.
The report also states that Chukha district emerged as the frontrunner in ATM transactions, experiencing an extraordinary surge of 564.3% in transaction value. From Nu. 141.22 million in Q1 2022, the district witnessed a remarkable increase to Nu. 938.09 million in Q1 2023. Other districts such as Samtse, Sarpang, Thimphu, and Wangdue Phodrang also saw noteworthy growth in the value of ATM transactions.
PoS Transactions Make a Comeback After a decline caused by the COVID-19 pandemic and closed borders, PoS transactions displayed signs of recovery. In Q1 2023, the volume of PoS transactions increased to 6.05 thousand, and the total value rose to 149.71 million. The reopening of national borders and the resurgence of tourism likely contributed to this significant rebound.
However, cheque Payments Maintain Importance Despite the popularity of card payments, cheque payments remain prominent for large-value transactions in Bhutan. In the first quarter of 2023, a total of 113,628 cheques worth Nu. 57.68 billion were recorded. Although cheque transactions experienced fluctuations over time, a slight recovery was observed in Q1 2023 after a decline in the previous year. Online banking, mobile payments, and digital wallets may have impacted the decline in cheque transactions due to their convenience and speed.
Meanwhile, RuPay Cards Show Varying Trends RuPay Acquiring, which enables Indian nationals to withdraw cash and make payments in Bhutan, experienced a remarkable increase in transaction volume (314.29%) and value (492.51%) in Q1 2023 compared to the previous year. Conversely, RuPay ATM and PoS acquiring transactions experienced a decline in volume and value from Q1 2020 to Q1 2021, indicating reduced usage during that period. However, a modest recovery was observed in Q1 2023, likely due to the reopening of the border with India.
RuPay Issuing, allowing Bhutanese nationals to use cards in India, saw significant growth in transaction volume and value. Q1 2023 witnessed a surge of RuPay ATM and PoS issuing transactions, with a volume of 12.16 thousand and a value of 60.00 million, reflecting the positive impact of the border opening for Bhutanese citizens.
Card Issuance Highlights During the first quarter of 2023, a total of 1,352 cards were issued in Bhutan. The majority were issued to private firms with individuals (425 cards), followed by laborers (135 cards). Pensioners had the lowest card issuance, with only 5 cards being issued.
Further, card payments in Bhutan continue to evolve, with ATM transactions and PoS activities witnessing varying trends. While cheque payments remain a popular option for large-value transactions, the convenience and speed offered by card payments, as well as the reopening of borders, are driving the recovery and growth of card-based financial transactions in the country.
SWIFT Transactions Surge in Bhutan's 1st Quarter of 2023
In the first quarter of 2023, Bhutan experienced a significant increase in SWIFT transactions, indicating a growing trend in international financial activities. A total of 14,605 transactions were recorded, marking a remarkable 120.49% growth in volume compared to the same quarter of the previous year.
Among the currencies used in SWIFT transactions, the US Dollar emerged as the most transacted currency, with 10,970 transactions. It was followed by the Australian Dollar with 1,910 transactions and the EURO with 1,023 transactions. This highlights the prominence of the US Dollar in international financial transactions conducted by individuals and businesses in Bhutan.
The International Payment Gateway (IPG) platform, which facilitates card payments in USD and INR, demonstrated robust performance in the first quarter of 2023. A total of USD 2,063 transactions and INR 878 transactions, with a combined value of Nu. 146.81 million, were processed through the IPG platform during this period. The IPG serves as a gateway for acquiring card payments made in USD and INR, providing a convenient and secure payment solution for international transactions.
Growing Number of IPG Merchants 
The popularity of the International Payment Gateway is evident from the increasing number of registered merchants. In the first quarter of 2023, 110 merchants registered with the International Payment Gateway Platform in the Bank of Bhutan Limited (BoBL), while 19 merchants registered with the International Payment Gateway Platform in the Bhutan National Bank Limited (BNBL). This brings the total number of IPG merchants to 402 for BoBL and 312 for BNBL, showcasing the expanding acceptance and adoption of card-based payments among merchants in Bhutan.
IPG transactions experienced a substantial increase in both volume and value compared to the same quarter of the previous year. Transaction volume witnessed an impressive growth of 397.63%, while transaction value skyrocketed by an astounding 5762%. This surge in IPG transactions reflects the increasing preference for digital and card-based payment methods in Bhutan.
Steady Growth in INR and USD Transactions In terms of INR transactions, both the volume and value experienced notable growth. Transaction volume increased by 334.65%, while transaction value surged by 577.68% compared to the same quarter of the previous year. Similarly, USD transactions witnessed a slight increase in volume by 430.33%, while transaction value saw a significant growth of 17221.17%.
The surge in SWIFT transactions, along with the strong performance of the International Payment Gateway, indicates Bhutan's increasing engagement in global financial activities. This trend showcases the country's efforts to enhance its participation in the international financial landscape and embrace the convenience and efficiency of digital payment solutions.