The Payments Bulletin by the Payment Systems and Oversight Division (PSOD) of the Maldives Monetary Authority (MMA) has highlighted a dramatic uptick in digital transactions over the last four years.

With a striking 300% increase in the total volume of account transfers and a 150% growth in value, Maldivians seem to be embracing digital channels at an unprecedented rate. Nearly 98% of these transactions were intra-bank transfers, indicating a robust internal network among Maldivian banks. Remarkably, 95% of these intra-bank transfers were conducted via internet banking or mobile applications.

The concept of the Electronic Money Issuance Service, introduced in 2016, has gained significant traction in 2022, largely thanks to the MMA issuing licenses to two new Payment Service Providers (PSPs).

The total number of PSPs offering this service now stands at four. With services ranging from cash-ins and cash-outs to bill payments and person-to-person (P2P) transfers, these PSPs have facilitated over 1 million cash-in and cash-out transactions in 2022 alone. Notably, 99% of these were cash-ins, reflecting a trend toward digital accumulation.

The report sheds light on the changing face of payments, with an average 124% year-on-year growth in the volume of transactions, excluding cash-in and cash-out. While post-paid bill payments continue to dominate, constituting 54% of transactions, other types like airtime top-up (26%) and utility bill payments (11%) are also on the rise.

While the overall payments landscape is overwhelmingly positive, the bulletin notes a 35% decline in remittance transactions over the four-year period from 2019 to 2022. This could be due to various factors, including economic instability and changes in the foreign worker population.

Most of the remittance activity was for outward transactions, with foreigners contributing to 74% of them. Bangladesh, Nepal, and the Philippines were the most frequent recipient countries.

The MMA’s Payments Bulletin 2019-2022 offers crucial insights into the rapidly evolving payments ecosystem in the Maldives. While digital payments and e-money accounts are on the rise, traditional remittance service providers are seeing a dip in their activities. These trends not only reflect a change in consumer behaviour but also hint at the promising digital future for the Maldivian financial landscape.