Wednesday, 6 July, 2022

Digitalising payments can add $6.2b to GDP

  • Staff Correspondent
  • 22 April, 2022 12:00 AM
  • Print news
Digitalising payments can add $6.2b to GDP

Shifting to digital payments from conventional practices can increase Bangladesh’s GDP by 1.7 percent or $6.2 billion a year, according to a new report.

The United Nations-based Better Than Cash Alliance and its member, Bangladesh government’s flagship programme, Aspire to Innovate (a2i) jointly prepared the report. 

Planning Minister MA Mannan virtually launched two publications titled “National Digital Payments Roadmap, Bangladesh 2022-2025” and “Measuring progress to scale: Responsible digital payments in Bangladesh” at an event on Wednesday night.

The report says that 53 percent of the $6.2 billion will come from digitalising just 30 percent of micro-merchant transactions in the retail sector.

45 percent will come from digitalising credit disbursements in the agricultural sector, and the remaining from scaling digital wages in the informal ready-made garment (RMG) sector.

Responsible payment digitalisation in these sectors, crucially prioritising women, will help accelerate progress towards the Sustainable Development Goals by 2030, the report says.

 “Bangladesh has achieved remarkable progress towards the Digital Bangladesh vision. Digital transactions have grown from 5 percent to 20 percent in 5 years – an impressive four-fold increase,” said Camilo Tellez, Deputy Managing Director at the Better Than Cash Alliance.

It also withstood the impacts of the pandemic by digitally delivering social safety payments, wages, and stimulus packages to citizens and industries, he said.

  “We look forward to continuing our work with the leaders of Bangladesh to advance digital payments nationwide, particularly for women, and sharing lessons from Bangladesh with our global Alliance members,” he added.

 Planning Minister MA Mannan said: “Bangladesh's economy has grown significantly in the last 13 years. We are moving forward towards being recognised as one of the top 25 economies in the world by 2035.”

“By 2030, we want to achieve the Sustainable Development Goals (SDGs),” he added.

 “By 2041, we want to transform into a fully developed state. Digitalisation can play a crucial role in this journey. It is one of the main commitments of our government and we are working diligently to achieve this goal by building a cash-less society, leaving no one behind,” he added.

 Since joining the Better Than Cash Alliance in 2015, the reports suggest that Bangladesh has made significant progress in moving towards a digital economy.

Based on the reports, the government released the National Digital Payments Roadmap 2022-2025.

The roadmap identifies 22 solutions to build a safe, interoperable, and inclusive digital payments ecosystem over the next three years in the RMG, retail, agriculture, health, and education sectors.

There are many areas where the country has already witnessed remarkable adoption of digital payments.

As digital payments ecosystem grows in scale and complexity, its dependence on infrastructure increases commensurately, said Anir Chowdhury, Policy Advisor of a2i.

“We are leaving no stone unturned to ensure that we build a reliable and inclusive digital infrastructure that will serve as the foundation on which digital payments and services can be built,” he noted.

Bangladesh Bank executive director Md Khurshid Alam highlighted Bangladesh’s preparation for the journey towards a cash-less society.

The National Digital Payment Roadmap 2022-25 and A Diagnostic Study was presented by Kiyom Nagodup Masali, Asia Pacific Head of Better Than Cash Alliance, and Nabila Khurshid, Bangladesh-Lead of Better Than Cash Alliance.

The a2i of the ICT Division and Cabinet Division, supported by the UNDP, builds on the Government of Bangladesh’s efforts to introduce a citizen-centric culture of innovation in civil service.

This aims to improve public service delivery and make services more inclusive, affordable, reliable and easier to access.

 Based at the United Nations, the Better Than Cash Alliance is a partnership of governments, companies, and international organisations that accelerates the transition from cash to responsible digital payments to help achieve the SDGs.

The Alliance has nearly 80 members, who are committed to digitalising payments to boost efficiency, transparency, women’s economic participation and financial inclusion, helping build economies that are digital and inclusive.