The demand for cash in Bangladesh is growing at a rate of 10% every year. To maintain this cash-based economy, Bangladesh spends nearly Tk20,000 crore annually just on cash management.
To reduce this cost and increase digital transactions, the Bangladesh Bank (BB) is set to develop an interoperable payment system with the support of the Gates Foundation, enabling seamless transactions of money, goods, and services anytime, anywhere in the country, Governor Ahsan H Mansur announced on Monday.
All financial institutions, banks, mobile financial services (MFS), microfinance institutions, and digital banks in the country will be connected to this single platform.
This interoperable system would allow instant transfers from mobile wallets, bank accounts, non-bank accounts, or institutional accounts directly to any other account.
Currently, services like bKash, Nagad, and various internet banking options are available in Bangladesh, but they remain fragmented.
Mansur revealed these while speaking at a discussion titled “Stakeholder Discussion on Interoperable Payment in Bangladesh” organized by the Policy Research Institute (PRI) and the Gates Foundation, a global leader in payment systems.
“We want a unified national payment system through which person-to-person and institution-to-institution transactions can be completed instantly. This will be a game-changer in building a cashless economy,” the governor further said.
“We want to move quickly in this process. If this system is successfully launched, every financial institution in the country will be connected to one platform, and Bangladesh will move towards a cashless economy,” he stated.
Regarding the money management cost, the governor said: “The cash-based economy is costly for us. The banking sector is losing about Tk20,000 crore every year, and the government is losing about Tk150,000 crore in revenue. Therefore, we have to reduce the use of cash step by step and move to digital transactions.”
However, previous attempts to launch such a system (interoperable payment) in Bangladesh had failed.
Ahsan H Mansur remarked that initiatives have been taken before, but that did not work accordingly.
But this time the initiative, being undertaken with the support of the Gates Foundation through the Mojaloop Foundation, was better positioned for success, he hoped.
He added that similar systems have been tested in countries like Pakistan with highly positive results. “Those experiences serve as both inspiration and lessons for us.”
Earlier, a keynote presentation was delivered by Bangladesh Bank Executive Director Arif Hossain Khan.
