BB targets July 2027 to launch 'Inclusive Instant Payment System'

Bangladesh Bank (BB) is targeting July 2027 to introduce an Inclusive Instant Payment System (IIPS), a unified digital payment platform designed to connect banks, mobile financial service (MFS) providers and other financial institutions, enabling faster, safer and more convenient transactions across different service networks.

The proposed system aims to establish an integrated payment ecosystem in which customers can transfer money and make payments seamlessly, regardless of the bank or financial service provider with which they maintain accounts or wallets.

The initiative is expected to expand financial inclusion, reduce dependence on cash, improve payment efficiency and extend digital financial services to people who remain outside the formal banking system.

The platform will be developed with technical support from the Gates Foundation through its Mojaloop initiative, an open-source software platform designed to facilitate interoperable digital financial transactions. 

Talking to BSS, BB Executive Director Md. Sirajul Islam said the primary objective was to connect all financial institutions through a common channel, gradually reducing the need for cash withdrawals and transfers between different service providers.

He said interoperability would ensure that customers were no longer restricted to transactions within the network of their own bank or financial service provider.

Once operational, IIPS is expected to support a broad range of transactions, including person-to-person transfers, merchant payments, business transactions, government disbursements and other financial services. 

It will enable funds to move directly between participating institutions in real time, subject to operational, settlement and security arrangements.

The initiative builds on the country's existing payment infrastructure, particularly the National Payment Switch Bangladesh (NPSB), which has been facilitating interoperability among participating banks for ATM, point-of-sale and internet banking transactions since 2012.

However, the existing framework has faced limitations in bringing all major financial service providers under a common network, particularly MFS operators and non-bank institutions.

Under an earlier arrangement, banks, MFS providers and payment service providers were instructed to facilitate interconnected transactions.

The central bank set maximum transaction charges, including VAT, at 0.15 percent for banks, 0.20 percent for MFS providers and 0.85 percent for payment service providers, while prohibiting charges on recipients.

Despite the initiative, participation from some major MFS operators remained limited, preventing the arrangement from achieving its intended reach. 

Sirajul Islam acknowledged that the existing system had fallen short of expectations, underscoring the need for a more comprehensive technological framework.

The proposed IIPS is expected to address these shortcomings by encouraging wider institutional participation and establishing a common infrastructure for transactions across the financial sector.

Beyond domestic payments, the platform could also create opportunities to improve the distribution of international remittances.

In July 2026, the Policy Research Institute of Bangladesh (PRI), with support from the Gates Foundation, launched a research initiative titled "Analysis of the Inclusive Instant Payment System (IIPS) in Bangladesh and Cross-Border Remittance as a Use Case."

The study brought together policymakers, central bank officials, financial sector representatives and researchers to examine the system's potential to strengthen financial inclusion, reduce remittance costs and promote formal financial channels.

PRI Chairman Dr Zaidi Sattar highlighted the significance of remittances to Bangladesh's economy, noting that they account for around six percent of the country's gross domestic product (GDP). He stressed the importance of directing these inflows through formal financial institutions and into productive investment channels.

Researchers have identified interoperable payment infrastructure as a potential means of making domestic remittance distribution more efficient.

With appropriate connections to authorised international remittance networks, IIPS could enable overseas transfers to reach beneficiaries' bank accounts and mobile wallets more quickly and potentially at lower costs.

However, such cross-border services would require further arrangements involving international partnerships, foreign exchange regulations, payment settlement mechanisms and connectivity with authorised overseas networks.

The benefits of the proposed system could extend beyond individual customers. Sirajul Islam said greater use of digital payments would help reduce the costs of printing, transporting, storing and managing physical currency.

Businesses could benefit from lower cash-handling expenses, improved accounting practices and more efficient transactions. The government could also streamline the distribution of salaries, allowances, subsidies and social safety net benefits through digital payment channels.

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Bangladesh's digital payment landscape has expanded significantly in recent years, driven by the growth of mobile financial services, internet banking, electronic fund transfers and QR-code-based transactions.

However, fragmented payment networks have continued to limit seamless transactions between different providers.

By establishing a common platform, Bangladesh Bank aims to overcome these structural barriers and create a more accessible and interconnected financial system.

The success of IIPS will depend largely on the participation of major financial institutions, the reliability and security of its technology, affordable transaction costs and public confidence in digital financial services.

If implemented effectively, the system could significantly reshape the country's payment landscape, making financial transactions more accessible and efficient while supporting transparency, formal financial participation and broader economic inclusion.

The July 2027 launch target therefore represents an important milestone in Bangladesh's efforts to build a unified and inclusive digital financial ecosystem.