Domestic Transactions Worth Nu.237.11 billion Recorded in 1st Quarter of 2023

Domestic Payments Surge in the First Quarter of 2023, Fueled by PoS, QR Code, and Paper Cheque Transactions
Domestic payments in Bhutan have witnessed remarkable growth during the first quarter of 2023, with a surge in both volume and value compared to the same period last year. According to the latest data released by the Bhutan National Bank (BNB), a total of 61.84 million transactions were recorded, comprising both intra and interbank domestic transactions, amounting to Nu.237.11 billion.
According to the report, the figures reveal an impressive increase of 34.97% in transaction volume and a substantial 73.31% increase in transaction value, signaling a robust expansion of the domestic payment landscape. This remarkable growth is primarily attributed to the rise in Point of Sale (PoS) transactions, QR code payments, and paper cheques.
PoS transactions experienced an exceptional surge of 3613.50% in volume and a staggering 21282.25% in value, amounting to Nu.149.01 million. The ease and convenience offered by PoS machines have contributed to their widespread adoption, empowering consumers and businesses alike to engage in cashless transactions seamlessly.
QR Code payments also demonstrated significant growth, witnessing a 120.73% increase in volume and a remarkable 126.80% increase in value, amounting to Nu.11.05 billion. The popularity of QR codes as a payment method has surged, providing a simple and secure means of transferring funds between individuals and businesses.
Furthermore, paper cheques experienced a substantial increase of 118.78% in volume and an impressive 166.22% in value, totaling Nu.36.01 billion. Despite the rise of digital payment alternatives, paper cheques remain a preferred choice for certain transactions, contributing significantly to the overall growth of domestic payments.
In terms of volume, mobile and internet banking dominated the domestic payment space during the first quarter of 2023, followed closely by QR code payments. However, concerning transaction value, QR code payments took the lead, followed by paper cheques and electronic fund transfers.
It is worth noting that although mobile banking and QR code payments are categorized under the same channel, they are segregated due to their independent integration with separate settlement accounts. Over the years, the share percentage of QR payments has been increasing at a faster pace compared to other channels, including mobile banking, indicating a growing preference for QR codes as a payment method.
The significant growth in domestic payments during the first quarter of 2023 reflects Bhutan's evolving financial landscape, with a shift towards digital payment solutions. The adoption of PoS machines, the popularity of QR code payments, and the enduring presence of paper cheques all contribute to a more diverse and inclusive payment ecosystem, empowering individuals and businesses in their financial transactions.
However, the first quarter of 2023 witnessed distinct trends in regional and international payments, reflecting the evolving financial landscape in Bhutan. According to data released by the Bhutan National Bank (BNB), regional payments, including RuPay card transactions through ATMs and PoS terminals in India and Bhutan, amounted to Nu. 61.20 million, with a total of 12,445 transactions.
However, it was noted that the number of RuPay ATM and PoS acquiring transactions was significantly lower compared to RuPay ATM and PoS issuing transactions. This discrepancy suggests that while the usage of RuPay cards is prevalent among individuals in both India and Bhutan, the acceptance of these cards at ATMs and PoS terminals in Bhutan is relatively limited.
On the other hand, international payments, comprising SWIFT and International Payment Gateway (IPG) transactions made through banks, recorded a total of 17,546 transactions amounting to Nu. 21.05 billion during the first quarter of 2023. Although the volume of international transactions increased by 143.19% compared to the same quarter in the previous year, there was a 22.58% drop in transaction value.
The International Payment Gateway (IPG) accounted for 2,941 transactions, while the Society for Worldwide Interbank Financial Telecommunication (SWIFT) recorded a total of 14,605 transactions. The IPG platform enables seamless international payment transactions through a secure online payment gateway, while SWIFT serves as a global messaging network for financial institutions to facilitate cross-border transactions.
The increase in the number of international transactions suggests a growing trend of global financial connectivity among Bhutanese individuals and businesses. However, the decrease in transaction value indicates that a higher volume of smaller-value transactions occurred during the first quarter of 2023.
The varying trends in regional and international payments highlight the need for continued efforts to enhance regional payment infrastructure and increase acceptance of RuPay cards at ATMs and PoS terminals within Bhutan. Moreover, while the growth in international transactions signifies expanding global connections, there is a need to explore avenues to boost the value of these transactions and promote more significant cross-border economic activities.
As Bhutan's financial ecosystem evolves, stakeholders and policymakers will continue to monitor these payment trends and work towards fostering a seamless, secure, and inclusive payment landscape, both regionally and internationally.