Q1 2023 Sees Impressive 125.77 Billion in Transaction Value

Continued Growth in Transaction Value in Q1 2023, Fueled by Rising Adoption of Digital Banking Channels
In the first quarter of 2023, the value of transactions in the financial sector reached an impressive milestone of 125.77 billion, indicating a sustained upward trajectory in the overall worth of transactions. However, the growth rate in transaction value appeared to have moderated slightly when compared to the previous year.
The Q1 2023 figures reflect a continued trend of increasing transaction values, affirming the growing reliance on digital payment channels in various economic activities. While the growth rate may have decelerated marginally, the sheer scale of the transactions showcases the enduring popularity and adoption of digital financial solutions.
Conversely, the value of transactions displayed a significant upward trend over the years. In the first quarter of 2020, the value of transactions amounted to 27.70 billion. Moving forward to the first quarter of 2021, the value surged to 64.81 billion, representing substantial growth in the overall value of transactions compared to the previous year. 
This trend continued into the first quarter of 2022, with the value of transactions reaching 91.07 billion, demonstrating a continued upward trajectory in mobile and internet banking transactions. In the first quarter of 2023, the value of transactions further increased to 125.77 billion, indicating continued growth, albeit at a slightly slower rate compared to the previous year.
Comparing the first quarter of 2023 to the same quarter of the previous year, there was a 9.32% increase in transaction volume and a substantial 38.10% increase in transaction value. The average value per transaction was recorded at Nu. 3,378.89, indicating a rise in higher-value transactions conducted through digital banking platforms.
This data reflects the increasing adoption of digital banking channels in Bhutan, as well as the trust individuals and businesses have in mobile and internet banking services for their financial needs. The convenience, accessibility, and reliability of these platforms contribute to their popularity among users.
During the reporting quarter from January to March 2023, the number of new mobile banking subscribers increased by 46.93 thousand, bringing the active number of mobile banking subscribers to 501,063. These figures highlight the growing adoption and usage of mobile banking services in Bhutan. Different services within mobile banking show varying numbers of new users and active users, indicating differences in popularity and customer usage patterns.
In terms of Internet banking, 181 new users subscribed during the first quarter, bringing the total number of net banking users to 29,946 as of the first quarter of 2023. Internet banking provides customers with a convenient way to access their bank accounts and perform transactions online. The data suggests that the adoption of Internet banking in Bhutan is growing, although there are variations in the number of users across different banks.
The continued growth in both transaction volume and value underscores the shift toward digital banking in Bhutan. As individuals and businesses increasingly rely on these platforms for their financial activities, the banking sector is expected to further enhance and expand its digital offerings to meet the evolving needs of customers in the digital age.
In the first quarter of 2023, QR code payments in Bhutan experienced a remarkable surge, with a total of 20.78 million transactions amounting to 19.76 billion in value. This accounted for 55.83% of all mobile banking transactions by volume and 15.71% by value. Compared to the same quarter of the previous year, the volume of transactions increased by 120.73%, while the value increased by 126.80%.
The rise in QR code payments can be attributed to the easing of lockdown restrictions and the normalization of economic activities. As a result, QR scan codes have gained popularity across various establishments such as shops, restaurants, cafes, and even taxis. Their contactless, touchless, and user-friendly nature has made them an attractive option for both merchants and consumers.
During the first quarter of 2023, banks in Bhutan successfully onboarded 4,849 new QR code merchants, bringing the total number of issued QR codes to 69,505. This represents a 7.50% increase compared to the total merchant registration in the fourth quarter of 2022.
Notable increases in QR code adoption were observed in specific Dzongkhags (districts) of Bhutan. Pemagatshel Dzongkhag witnessed a significant 69.84% increase, followed by Sarpang Dzongkhag and Lhuntse Dzongkhag with increases of 67.61% and 61.54%, respectively. However, the highest issuance of QR codes still remains in Thimphu Dzongkhag.
In terms of specific mobile wallet services, Bhutan Telecom onboarded 10 Bngul merchants with 102,602 users, Tashi Cell onboarded 58,263 merchants for eTeeru with 95,604 users, and the Bank of Bhutan (BOBL) registered 168,902 goBoB users. Wallet transactions offer quicker and more efficient payment options compared to traditional mobile banking. They provide greater flexibility and accessibility, enabling individuals without bank accounts to participate in the digital economy using their smartphones.
The data from Q1 2020 to Q1 2023 demonstrates a significant upward trend in wallet transactions. In Q1 2020, 7,210 transactions worth 5.51 million took place using wallets. By Q1 2021, there was a substantial increase in both volume and value, with 230.40 thousand transactions worth 105.67 million. The growth continued in Q1 2022, reaching 1,221.37 thousand transactions worth 433.49 million. Finally, in Q1 2023, wallet transactions reached 2,137.33 thousand, amounting to 599.58 million in value.
Among the different wallet services, Bngul accounted for 7.72% of the total transaction volume, while eTeeru accounted for 20.67%, indicating higher usage. goBoB had the largest share, accounting for 71.61% of the total volume of transactions. In terms of transaction value, Bngul represented 11.38% of the total, eTeeru accounted for 28.80%, and goBoB dominated with 59.81% of the total value.
goBoB's dominance in wallet transactions can be attributed to its easy interoperability with other wallet accounts, the ability to top up mobile numbers from various telecom operators, and most importantly, the integration with bank accounts provided by the Bank of Bhutan. On the other hand, Bngul had a relatively smaller share in both volume and value, indicating lower usage compared to the other two wallets.