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Bangladesh Bank (BB) is targeting July 2027 to launch an Inclusive Instant Payment System (IIPS) to connect banks, mobile financial service (MFS) providers and other financial institutions through a common digital payment platform.
The system will enable customers to transfer money and make payments seamlessly across different financial service networks, regardless of their bank or wallet provider.
BB Executive Director Md Sirajul Islam told BSS that the main objective was to bring all financial institutions under a common platform, reducing dependence on cash and making transactions faster and more convenient.
He said the proposed system would remove existing barriers to interoperability, allowing customers to conduct transactions beyond the networks of their own banks or financial service providers.
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 payments.
Once operational, IIPS is expected to support person-to-person transfers, merchant payments, business transactions, government disbursements and other financial services.
The initiative builds on the existing National Payment Switch Bangladesh (NPSB), which has facilitated interoperability among participating banks for ATM, point-of-sale and internet banking transactions since 2012.
However, the existing infrastructure has not been able to bring all major financial service providers, particularly MFS operators and non-bank institutions, under a fully integrated network.
An earlier central bank initiative sought to connect banks, MFS providers and payment service providers by setting transaction charges at 0.15 per cent for banks, 0.20 per cent for MFS providers and 0.85 per cent for payment service providers, including VAT. Recipients were not allowed to be charged.
But limited participation by some major MFS operators prevented the arrangement from achieving its intended coverage.
Sirajul Islam acknowledged the shortcomings of the existing system, saying a more comprehensive technological framework was needed to ensure wider participation.
The proposed platform could also facilitate international remittance distribution by enabling overseas transfers to reach beneficiaries’ bank accounts and mobile wallets more efficiently.
In July 2026, the Policy Research Institute of Bangladesh (PRI), with support from the Gates Foundation, launched a study titled “Analysis of the Inclusive Instant Payment System (IIPS) in Bangladesh and Cross-Border Remittance as a Use Case”.
The research examined the system’s potential to strengthen financial inclusion, reduce remittance costs and encourage the use of formal financial channels.
PRI Chairman Dr Zaidi Sattar highlighted the importance of remittances to the economy, saying they account for around six per cent of Bangladesh’s gross domestic product (GDP).
However, cross-border transactions through IIPS would require further arrangements involving international partnerships, foreign exchange regulations and connections with authorised overseas payment networks.
Sirajul Islam said wider adoption of digital payments would also reduce the costs of printing, transporting, storing and managing physical currency.
Businesses could benefit from lower cash-handling expenses and more efficient transactions, while the government could use the platform to distribute salaries, allowances, subsidies and social safety net benefits more effectively.
The success of IIPS will largely depend on the participation of major financial institutions, transaction costs, technological reliability and public confidence in digital payments.
If implemented effectively, the system could help reduce cash dependence, expand access to formal financial services and create a more integrated digital payment ecosystem in Bangladesh.