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The Policy Research Institute of Bangladesh (PRI) has proposed the introduction of an Inclusive Instant Payment System (IIPS) to unify the country’s fragmented digital payment ecosystem, identifying cross-border remittances as the area with the greatest potential economic benefit.
The proposal was unveiled on Thursday at an inception workshop titled “Analysis of the Inclusive Instant Payment System (IIPS) in Bangladesh and Cross-Border Remittance as a Use Case” held at the PRI office in Banani.
The study was jointly presented by PRI Research Director Dr Bazlul Haque Khondker and Director M A Razzaque, who outlined how an interoperable payment platform could significantly reduce remittance costs, enhance financial inclusion and improve the efficiency of digital transactions.
According to the study, the proposed IIPS would be built on the open-source Mojaloop platform, enabling instant, secure and low-cost transactions across banks, mobile financial service (MFS) providers and other financial institutions. The platform would allow seamless bank-to-bank, wallet-to-wallet and bank-to-wallet transfers, while also supporting QR code payments, cross-border remittances, merchant transactions and government-to-person disbursements under a single interoperable framework.
The researchers said the initiative aligns with Bangladesh’s National Financial Inclusion Strategy and the Sustainable Development Goals by expanding access to affordable digital financial services.
Although Bangladesh’s mobile financial services sector, led by bKash, Nagad and Rocket, has grown rapidly to support remittances, salary payments and government transfers, the study noted that the ecosystem remains largely “closed-loop”, preventing customers of one provider from transferring money directly to users of another platform.
Previous attempts to establish interoperability, including the Bangladesh Financial Platform-Bangladesh (BFP-B) programme implemented between 2017 and 2020 and the ICT Division’s Binimoy platform, which was discontinued in 2024, achieved limited success. The study attributed this to voluntary participation, which offered dominant service providers little commercial incentive to connect their platforms.
Citing the Global Findex Database 2025, the researchers said only 43 percent of Bangladeshi adults currently own a formal financial account, while just 34 percent make or receive digital payments. They also highlighted a 20-percentage-point gender gap in digital financial access, one of the widest in South Asia.
The study identified cross-border remittances as the most promising application of an interoperable payment system. Bangladesh received US$30.3 billion in formal remittances during fiscal year 2024-25. However, despite record levels of overseas employment, formal remittance inflows stagnated in FY2022-23, largely because many migrant workers continued to rely on informal hundi channels that are often faster and less expensive than formal banking routes.
Globally, the average cost of sending remittances remains around 6.5 percent. By contrast, interoperable payment corridors such as the PayNow-PromptPay linkage between Singapore and Thailand have reduced transfer costs to below one percent. Based on these experiences, the study estimates that Bangladesh could save between US$250 million and US$400 million annually by introducing similar low-cost, interoperable remittance corridors.
To assess the potential impact of the proposed system, the researchers employed a panel fixed-effects model using data from the Global Findex Database and the World Bank’s World Development Indicators, covering between 87 and 107 middle-income countries. The analysis compares a scenario in which IIPS is introduced in 2026 with a business-as-usual outlook through 2030, measuring its likely effects on financial inclusion, digital payments and macroeconomic indicators, including remittance inflows.
The research will be conducted in four phases. These include a review of international best practices and benchmarking against successful instant payment systems such as India’s UPI, Brazil’s PIX, Pakistan’s RAAST and Thailand’s PromptPay, followed by ecosystem analysis and survey design, benefit and impact modelling, and finally the formulation of policy recommendations aimed at developing an interoperable, low-cost national payment infrastructure.
The researchers said the proposed IIPS has the potential to transform Bangladesh’s digital financial ecosystem by making transactions faster, cheaper and more accessible while strengthening the country’s formal remittance channels and supporting broader financial inclusion.