Bangladeshis spend highest in India, US, Thailand

Bangladeshi people spent a staggering Tk 426 crore through credit cards outside the country in March 2023 and the highest cross-border transactions — Tk 103 crore — took place in India, shows a Bangladesh Bank (BB) report.

The second highest such cross-border transactions of Tk 50 crore took place in the United States, followed by Tk 42 crore in Thailand, Tk 41 crore in the United Arab Emirates, Tk 34 crore in Singapore, Tk 24 crore in the United Kingdom, and Tk 22 crore in Saudi Arabia, said the BB report on credit card spending.

Moreover, Tk 16 crore cross-border transactions took place in Malaysia, Tk 16 crore in Canada, Tk 13 crore in the Netherlands, Tk 10 crore in Ireland, Tk 9 crore in Australia and Tk 40 crore in other countries (162 countries), read the report.

The report, titled “An Overview of Credit Card Users Spending

Pattern Within and Outside the Country,” was released on Thursday.

Currently, 43 scheduled banks and non-bank financial institutions (NBFIs) in the country are issuing credit cards to clients of a total of 61 banks and 35 NBFIs.

The central bank made the report as it observed that the use of credit cards by banks and NBFIs has gone up sharply. The volume of their transaction is increasing even at a higher pace.

In March, credit card spending by Bangladeshis outside the country stood at Tk 426 crore, up from Tk 312 crore a month ago, said the report.

In the same month, credit card transactions within the country stood at Tk 2,374 crore, up by 9.79 per cent from a month ago.

On the other hand, spending by foreigners and non-resident Bangladeshis through credit cards issued by banks/NBFIs of other countries stood at Tk 236 crore in March, up from Tk 214 crore a month ago, said the report.

Category wise spending

In cross-border transactions, Bangladeshis mostly used their credit cards in departmental stores, which are 43.99 per cent of the total transactions that took place outside the country, according to the report.

Of the rest, cardholders spent 14.37 per cent on medicines, 11 per cent on clothing, 6.92 per cent for transportation, 6.08 per cent for cash withdrawal, 5.99 per cent on business services, 4.61 per cent on professional services, and the rest of the spending was for government services, utilities, contractual services and agriculture.

Both in and outside the country, credit cards of VISA and MasterCard were used mostly. In local transactions, cardholders used VISA for 70.26 per cent of the total spending and MasterCard for 17.04 per cent.

On the other hand, for transactions abroad, Bangladeshi cardholders used VISA for 77.35 per cent of the total spending and MasterCard for 13.48 per cent. The rest was spent through AMEX, Diners, UnionPay and JCB credit cards.

Credit card usage in Bangladesh by foreigners

Among all the foreign nationals, the maximum amount of spending in Bangladesh was carried out by US nationals, which is 25.97 per cent of the total transactions through credit cards issued by the US.

UK nationals spent 12.03 per cent through credit cards, Indian 10.41 per cent, Singaporeans 4.50 per cent, Chinese 4.10 per cent, Canadians 3.9 per cent, Japanese 3.41 per cent, and Hong Kong nationals spent 3.40 per cent, according to the BB report.

In March, it said, foreigners spent Tk 96 crore in department stores through credit cards, Tk 53 crore in cash withdrawal, Tk 53 crore on transportation, Tk 17 crore in clothing and Tk 6 crore in business services.

Foreigners spent the highest Tk 143 crore through VISA, Tk 90 crore through MasterCard and the rest through UnionPay, Amex, Diners and JCB credit cards.

Why is credit card spending growing so fast?

The use of credit cards is growing rapidly to keep up with the acceleration of digital payment, said Ahsan Ullah Chowdhury, head of Digital Financial Services at Eastern Bank Ltd.

He said that credit card use in the international segment had fallen drastically during the Covid-19 pandemic when many countries imposed travel bans.

“But now it is growing again. The use of plastic cards has been increasing after the withdrawal of the travel ban,” he added.

Card transactions increased after people’s businesses gained pace when the pandemic situation eased, he said.