🇧🇩 Payments in Bangladesh

Bangladesh Bank, regulator and operator

Bangladesh Bank is Bangladesh’s central bank. It both regulates payments and operates the systems that carry them. The national switch, the bulk ACH, check image clearing, the RTGS, and the domestic card scheme are all run directly by the central bank, with no industry-owned utility or bank consortium in between to govern access. That setup is rare. In the region, only the Royal Monetary Authority of Bhutan works the same way. The first point of contact for any payment acceptance project is therefore the central bank’s Payment Systems Department (PSD), which issues payment licenses, not a private operator selling access.

The Payment and Settlement Systems Act, 2024 is the law that underpins Bangladesh’s regime for payment systems and the licenses tied to them. It was passed on July 4, 2024, and took effect on November 4, 2024, as Bangladesh Bank confirms in its own statistical publications. Before that, the regime rested on regulations issued under the central bank’s general powers, with no dedicated statute. Licenses granted since then cite sections of the Act, not the earlier regulations. A license application drafted on the old regulatory basis therefore maps to none of the sections under which licenses are now granted.

The regime has four types of license, which differ in the activity covered and in who holds the license. The PSO (Payment System Operator) license covers operators of a system between participants, gateways, and aggregators. The lead participant must be a scheduled bank or a financial company. The PSP (Payment Service Provider) license covers e-wallet and mobile wallet providers that serve end customers directly and settle through a bank. The MFS license follows a different logic. It is granted to a bank, which runs the service through a dedicated subsidiary. The digital bank license, created in 2023, is a full banking license, not a light payments license.

Mobile financial services: 239 million accounts, 4% of value spent at merchants

Mobile financial services (MFS) are payment accounts held with an institution and used from a mobile phone, backed by an agent network for cash deposits and withdrawals. Bangladesh put MFS under *the bank-led model from the start, and kept it longer than most countries where the service took off. Bangladesh Bank grants the MFS license to a commercial bank*, not to a mobile network operator as in Kenya or Ghana. The license-holding bank runs the service through a dedicated subsidiary, which does not hold the license itself. The official register lists 14 services at 13 banks. Yet subscribers are concentrated in three brands, which together account for more than 80%.

Bangladesh Bank publishes a monthly breakdown of MFS transaction value by product, which shows how the service is actually used. The picture differs from what the number of open accounts would suggest. It describes a system used first to move cash in and out, secondarily for person-to-person transfers, and hardly at all to pay merchants.

Multiple account holding means one person holding several accounts, which inflates the account count without adding users. The country has about 175 million people and 239 million registered MFS accounts, only 87 million of which were active over three months. It is common for one person to hold a bKash account, a Nagad account, and a bank’s mobile banking account. Sizing based on reported accounts overstates the addressable base two- to threefold. The only usable metrics are transaction volumes and 30- or 90-day active users. The partner holds this data, so access to it must be a contract term, secured before signing, not a reporting annex produced later.

bKash, Nagad, Rocket: who is behind each brand

According to Bangladesh Bank, three brands account for more than 80% of the country’s MFS subscribers. Each rests on a different legal structure, so the entity that signs a commitment has a different status from one brand to the next. bKash is a commercial company controlled by a bank. Nagad is a postal service, placed under central bank administration. Rocket is a banking product backed by a single commercial bank. The applicable liability regime follows from that status, and it does not carry over from one brand to another.

On customer pricing, bKash’s public fee schedule is the market benchmark. Cash-out costs 1.85% at a standard agent, via the app or the USSD code *247#, and 1.49% at a Priyo Agent or an ATM. Merchant payments are free for the customer, because the merchant pays the acceptance fee instead. That gap between a charged withdrawal and a free payment is the pricing incentive operators use to shift usage from withdrawals to commerce. The incentive has not changed the volume mix. Merchant payments are still 4.2% of value.

Distribution of MFS in Bangladesh relies on the agent networks of these three brands. No foreign firm has a comparable network in Bangladesh, and rebuilding a 1.86 million-point network is not a fundable project. Entering this market therefore means a partnership with an established operator, not head-on competition. Negotiations then turn on three points: the share of the cash-out fee, access to transaction data, and the length of exclusivity. The third is the most fragile legally with Nagad, whose governance rests with a body appointed by the regulator.

NPSB, BEFTN, Binimoy: interoperability imposed by circular

On October 13, 2025, Bangladesh Bank issued a circular on payment account interoperability. From November 1, 2025, all banks, MFS operators, and PSPs must route any-account-to-any-account transfers through the NPSB: bank to MFS, MFS to MFS, and PSPs included. A bKash-to-Nagad transfer, which did not exist before that date, is now mandatory, just like a transfer between two banks. The circular does three things. It makes the rail mandatory, it sets prices by category of institution, and it bans charging the recipient.

Binimoy is the alias platform linking banks, MFS operators, and PSPs, billed at launch as “Bangladesh’s UPI.” Official half-year data credit it with 217,213 transactions worth BDT 76.03 crore in the first half of 2025, or 0.00% of both volume and value across all of the country’s platforms. BEFTN alone processed 184 million transactions over the same period. Binimoy works, but its share rounds to zero on both measures. Nor does it appear among the systems the central bank lists as operational on its dedicated page. Its share of national flows does not justify ranking it among the country’s core rails, alongside BEFTN and the NPSB.

Cards: an urban niche and a drain on foreign currency

In Bangladesh, the payment card is an urban, salaried, and largely withdrawal-driven instrument, not a mass-market one. Bangladesh Bank publishes a monthly statistical review of card usage, in more detail than most central banks provide, broken down by sector, card type, and country of spend. That review is the source of the figures below, rather than vendor estimates or regional extrapolations.

The spending breakdown confirms the niche profile. In April 2026, domestic credit card transactions reached BDT 38,683 million, 49.24% of it at department stores. Nearly half of card usage is concentrated in a single type of merchant. Credit actually drawn on cards is also marginal nationwide. Limits granted by 48 banks and one NBFC total BDT 412.95 billion, against BDT 140.45 billion outstanding at the end of April 2026. Utilization is therefore around one-third. Bangladeshi cardholders use credit cards to pay for purchases, and make little use of the credit line attached.

TakaPay is Bangladesh’s national card scheme, launched on November 1, 2023, with Sonali Bank, City Bank, and BRAC Bank, on the NPSB platform the central bank already runs. It was created in response to the gap between what Bangladeshi cardholders spend abroad and what foreign cardholders spend in Bangladesh. The goal is to stop paying international networks’ scheme fees in foreign currency on purely domestic transactions whose settlement involves no currency conversion. Its purpose is macroeconomic first and commercial second. A co-badge with RuPay has been announced for flows between India and Bangladesh. It would be the first intraregional card link in South Asia, but so far it remains an announcement.

Exchange controls: quotas, supporting documents, and card limits

The taka is subject to exchange controls, a regime under which every transaction with a foreign party requires a foreign currency entitlement and supporting documents. Controls apply transaction by transaction, on documents, through licensed banks known as *authorized dealers (ADs), which the central bank tasks with checking the paperwork. The constraint this regime places on a payment acceptance project concerns cash management, and is almost never technical. The exchange rate regime, on the other hand, changed recently. A crawling peg band was introduced in May 2024 around a central rate of BDT 117 per dollar. Bangladesh Bank let the market set the rate on May 8, 2025*, a condition of a $4.7 billion IMF program. The taka now floats. The quotas have not changed.

Bangladesh Bank’s Guidelines for Foreign Exchange Transactions set what a resident can take out of the country, and through which instrument. The annual travel quota falls under chapter 12, paragraph 1(ii). It is $5,000 per calendar year for SAARC countries and Myanmar, and $7,000 per calendar year for the rest of the world. The amount released must be endorsed on the traveler’s passport in indelible ink, with the branch stamp, and reported to the central bank’s Online Foreign Exchange Transaction Monitoring System. A departing passenger may carry only BDT 10,000 in cash, regardless of the travel quota released to them.

• International card (chapter 19, para. 1): usable only against a closed list of entitlements (travel quota, exporter ERQ account balance, RFCD account, Hajj quota, official mission, business travel quota, private foreign currency account, entitlements of IT companies that are BASIS members).
• Online payments by international card (chapter 19, para. 17): capped at $300 per transaction, charged against the unused travel quota, plus an additional $1,000 per year at most.
• IT companies that are BASIS members (chapter 19, para. 11): $6,000 per card, within an envelope of $30,000 per calendar year per company, on the association’s recommendation.
• Virtual card for app and game developers (chapter 19, para. 13): $300 per calendar year, against proof of training or participation.
• Card linked to an exporter ERQ account (chapter 19, para. 2a): up to three executives, with a single issuing bank, for the exporting company’s business expenses.
• Reporting (chapter 19, para. 20): monthly statement of international cards to the Foreign Exchange Operation Department, and ongoing reporting to the Online International Card Monitoring System.

In the other direction, collection rules for Bangladeshi service exporters have been eased. A July 2026 circular from the Foreign Exchange Policy Department raises the amount that can be received through an *Online Payment Gateway Service Provider (OPGSP) to $10,000 per transaction. It covers three activities: data entry and processing, offshore IT services, and business process outsourcing. Platform statements and emails are now accepted as proof, in place of the standard export documentation required for goods. Foreign currency retention quotas complete the setup. An IT freelancer keeps 50% of foreign currency earnings, and other service exporters 30%*.

Migrant remittances, the country’s largest payment system

Migrant remittances are the money that workers abroad send home to their households. In Bangladesh, they finance the balance of payments and feed foreign exchange reserves, and since 2024 they have spared the country an external liquidity crisis. No domestic payment rail weighs as much in the country’s external balance. The Gulf–South Asia corridor is the largest in the world by volume, and Bangladesh is one of its three main destinations, along with India and Pakistan. On the sending side, the channel is still overwhelmingly physical: exchange houses, cash, and migrant worker payroll. On the receiving side, it is digital. The corridor’s cost structure follows from that asymmetry, with costs concentrated in the physical half of the chain.

The 2.5% government incentive serves as *a tool to compete with hundi***, the informal settlement system that bypasses the banking channel and deprives the country of the corresponding foreign currency. The operator that captures the legal flow earns a premium, and bKash adds a commercial bonus that stacks on top of the government incentive. The scheme costs Bangladesh’s budget on the order of BDT 7,000 crore a year, or roughly $580 million, a figure regularly debated in the local public discussion. Scrapping it is a recurring political possibility. That would immediately change the economics of remittance partnerships, whose margins rely partly on this premium.

Garments: letters of credit, back-to-back LCs, and factory payroll

Ready-made garments are Bangladesh’s export economy, and they shape its business payments. In FY2024–25, ready-made garment exports reached $39.35 billion, up 8.84%, out of total exports of $48.28 billion. More than 80% of export earnings therefore come from a single sector, exposed to demand from a handful of import markets. FY2025–26 saw a decline to $38.70 billion, down 1.64% from the previous year. Bangladesh’s business payment instruments were designed around this sector because of that concentration, and they fit poorly with trade outside it.

The core instrument is the back-to-back LC, short for *back-to-back letter of credit*. The Bangladeshi exporter receives a letter of credit from its foreign buyer, then opens a second letter of credit against it to import fabric and trims. It ties up none of its own cash. The structure rests entirely on the strength of the original letter of credit, and it concentrates risk on the Bangladeshi bank that issues the second one. Checks, for their part, remain legally strong in domestic business-to-business payments, cleared through BACPS since 2010.

• The Export Development Fund (EDF), created in 1989, provides foreign currency refinancing for raw material imports under back-to-back LCs. It was cut to $2.51 billion on October 29, 2023, after a special inspection conducted under the IMF program found illicit outflows. The general cap per exporter went from $15 million to $10 million, for 180 days at 4%.
• The Export Facilitation Pre-finance Fund (EFPF), launched on January 1, 2023, has BDT 10,000 crore, in taka rather than foreign currency. Banks refinance through it, and exporters borrow for six months against back-to-back LCs, up to BDT 200 crore per company. Rates have since been raised closer to market levels.
• ERQ accounts (Exporters’ Retention Quota). Exporters keep a share of their foreign currency earnings for business expenses, including through international cards linked to the account for up to three executives.
• Multicurrency BD-RTGS. It settles domestic interbank transactions in US dollars, euros, pounds sterling, and Canadian dollars. A foreign currency settlement between two Bangladeshi banks therefore does not have to go through a foreign correspondent bank.

Paying factory workers is the garment sector’s second big payments challenge, and the first serious high-volume use case for MFS. Millions of accounts were opened to pay garment wages, backed by the government’s a2i program and the Better Than Cash Alliance. The central bank intervened through pricing rather than a usage mandate. During the 2020 pandemic, it capped cash-out on wages at 0.8% for disbursements under the government refinancing scheme. The disbursing bank bore 0.4%, and the worker only 0.4%. The cap applied only to that scheme, but 0.8% has remained the sector’s price benchmark.

Accepting payments online: mandatory escrow, gateways, and operational risk

Bangladesh overhauled its online payments framework after the 2021 e-commerce crisis. That year, several platforms took large advance payments without delivering, among them Evaly, eOrange, Qcoom, Dhamaka Shopping, and Alesha Mart. Hundreds of crores of taka were left stuck in payment gateways, and several criminal cases are still pending. At the time, no mechanism kept customer funds separate from platform funds. The regulatory response was fast and heavy-handed, and it has governed how customer advances are held ever since. Today it shapes every marketplace model.

The *Digital Commerce Operation Guidelines 2021 regulate customer advances. A platform may not take more than 10% of the product value in advance unless the payment goes through an escrow account approved by Bangladesh Bank. The escrow* mechanism, introduced in July 2021, holds the funds at the bank or financial institution until the seller provides proof of delivery. The seller then requests settlement, and the gateway releases the funds to the platform’s account. The resulting cash delay is written into the rule itself, and it has to be financed as working capital.

*Agent banking is a regime separate from MFS that allows a bank to delegate transactions to third-party outlets that remain under its responsibility. At the end of December 2025, deposits collected through this channel reached BDT 49,356 crore*, up 18.1% year over year, with BDT 40,876 crore coming from rural areas. Outstanding loans stood at BDT 11,755 crore, and 29 banks ran the channel. This network is the country’s second physical distribution grid, after MFS agents. It follows standard banking rules.

• Check the license, not the brand: ask for the PSO, PSP, or MFS license number and the entity name in Bangladesh Bank’s register. Trade names often differ from the registered legal name, and the mismatch can render a clause meaningless.
• Require 30- and 90-day active users: registered accounts overstate the addressable base two- to threefold. Never size on the 239 million reported accounts.
• Model the cash outflow: e-commerce escrow, foreign currency retention quotas, and repatriation timelines. Moving funds out of a Bangladeshi merchant account is a regulated, documented, and sometimes rationed process.
• Don’t mistake a mandate for adoption: Bangla QR is mandatory and barely used; Binimoy rounds to 0.00% of national volume. The rail exists, and usage has to be measured separately.
• Check the partner’s governance: Nagad has been run by a regulator-appointed body since August 2024, and its digital bank license is suspended. A multiyear exclusivity clause signed on that basis is fragile.
• Map the foreign exchange caps before designing the checkout flow: $300 per online transaction for a resident cardholder. No amount of conversion optimization makes up for a regulatory cap.