Interoperable payment system to raise digital transactions: Governor

Business Report :

Reducing the cash management cost and to enhance digital transactions, the Bangladesh Bank 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.

The interoperable system would allow instant transfers from mobile wallets, bank accounts, non-bank accounts, or institutional accounts directly to any other account, said the central bank governor Ahsan H Mansur on Monday 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.

The demand for cash in Bangladesh is growing at a rate of 10 percent every year. To maintain this cash-based economy, Bangladesh spends nearly Tk20,000 crore annually just on cash management.

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.”

He acknowledged that previous attempts to launch such a system in Bangladesh had failed, but noted that this time the initiative, being undertaken with the support of the Gates Foundation through the Mojaloop Foundation, was better positioned for success.

“Similar systems have been tested in countries like Pakistan with highly positive results. Those experiences serve as both inspiration and lessons for us,” he said.

Expressing optimism, Mansur said, “With the cooperation of the Gates Foundation and Mojaloop Foundation, and by using our own internal capacity, Bangladesh Bank will be able to launch an effective interoperable payment system within a short period.”

“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,” Mansur added.

Earlier, a keynote presentation was delivered by Bangladesh Bank Executive Director Arif Hossain Khan.

Currently, services like bKash, Nagad, and various internet banking options are available in Bangladesh, but they remain fragmented.