Bangladesh’s Cashless Journey: Ambition, Reality and Challenges

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The government’s ambition to transform Bangladesh into a cashless economy has gained strong momentum in recent years. From debit and credit cards to mobile financial services (MFS) and digital wallets, citizens are being encouraged to conduct financial transactions digitally. Yet despite the rapid expansion of digital payment systems, cash continues to dominate the economy.
At the Cashless Bangladesh Summit 2025, policymakers, economists, bankers, and fintech leaders discussed the country’s progress, pain points, and prospects. The discussions revealed both optimism and obstacles: while digital inclusion is advancing, behavioral and institutional barriers continue to hinder the transition from cash to code. According to Bangladesh Bank data shared at the summit, total MFS transactions reached Tk 17.37 trillion in 2024—roughly equivalent to half of the country’s GDP. Nearly 48 per cent of the population now maintains a mobile wallet, and about 84 per cent of all banking activities are conducted digitally Over the past decade, Bangladesh’s financial landscape has been transformed by mobile financial services and digital banking. What began with the launch of Dutch-Bangla Bank’s Rocket in 2011—followed by bKash and Nagad—has grown into one of the world’s most dynamic fintech ecosystems.

Digital salary payments, e-commerce, utility bills, and remittances have accelerated the shift toward digital finance. New platforms such as Bangla QR, EkPay, and Binimoy have expanded payment options, while many government services now require digital transactions. Even small entrepreneurs and micro- merchants are increasingly adopting digital tools, aided by low-cost smartphones and improved connectivity. These trends have significantly expanded financial inclusion, bringing millions of unbanked citizens into the formal economy. Yet despite these gains, the demand for cash continues to rise, posing serious economic and administrative challenges. Bangladesh Bank spends nearly Tk 200 billion annually printing and distributing NE banknotes, while commercial banks collectively spend another Tk 2.6 billion on cash handling and logistics.

The demand for cash continues to grow at around 10 per cent per year, indicating that digital penetration has not yet reduced reliance on physical money. A potential breakthrough is expected from the interoperability initiative to be launched by Bangladesh Bank on November 1, 2025. This system will allow users to transfer funds seamlessly between different MFS platforms—such as bKash, Nagad, and Rocket—and traditional bank accounts through the National Payment Switch Bangladesh (NPSB). This will eliminate the current platform silos, making digital transfers faster, cheaper, and more convenient. Greater interoperability could stimulate competition, reduce costs, and encourage more merchants to accept digital payments. In parallel, the central bank has started issuing digital bank licenses, promoting Bangla QR-based merchant payments, and strengthening instant payment gateways. Together, these initiatives can make Bangladesh’s financial system more integrated and inclusive. However, technology alone cannot guarantee a cashless future. Around 85 per cent of Bangladesh’s workforce operates in the informal sector, where income records, digital literacy, and access to formal banking remain limited. Internet penetration and power connectivity, while improving, are still inconsistent in rural areas.

Small businesses often prefer cash because of high transaction fees and fear of cyber fraud. According to Transparency International Bangladesh (TIB), MFS transaction costs are 7 to 15 times higher than traditional banking fees, discouraging usage among low-income groups. Trust is another major issue. Reports of digital fraud, phishing, and misuse of MFS channels—such as money laundering, illegal online betting, and cryptocurrency dealings—have eroded public confidence. Without a strong consumer protection framework and rapid redress mechanisms, digital trust will remain fragile. Beyond practical challenges, the persistence of cash reflects deeper governance issues. In societies where corruption, tax evasion, and black money are widespread, cash remains the preferred medium to conceal unaccounted wealth. An IMF estimate in 2015 valued Bangladesh’s shadow economy at Tk 4,532 billion, equivalent to about 31 per cent of GDP at the time. The underground economy has likely grown in parallel with formal economic expansion. Unless structural reforms address corruption and unreported wealth, digital initiatives alone will not meaningfully reduce cash circulation. To accelerate progress, several targeted reforms are necessary: First, rationalize MFS transaction fees and enhance competition among providers to make digital payments more affordable, especially for rural and low-income users. Second, expand digital literacy programs through partnerships between Bangladesh Bank, the ICT Division, NGOs, and telecom operators. Training for women, small entrepreneurs, and farmers can empower those left behind in the digital shift.

Third, strengthen cybersecurity and consumer protection by enforcing robust KYC (Know Your Customer) procedures, multi-factor authentication, and faster fraud redress systems. Fourth, introduce fiscal incentives—such as tax rebates for merchants and individuals who adopt digital payments—while imposing small surcharges on large cash transactions to discourage excessive cash use. Finally, ensure the successful rollout of the interoperability system and nationwide promotion of Bangla QR so that even small businesses can transact digitally without technical barriers. A successful cashless transition depends not only on technology but also on trust. Citizens must believe that digital transactions are secure, reliable, and transparent. MFS providers should prioritize data privacy, ensure transparent pricing, and communicate clearly with users. Regulators, in turn, must enforce compliance and accountability without stifling innovation. Cooperation among Bangladesh Bank, the National Board of Revenue (NBR), and law enforcement agencies can ensure digital integrity while promoting innovation and inclusion.

Equally important is for the government to lead by example—digitizing all public payments, including salaries, social safety nets, and tax collections. When citizens see the state embracing digital finance transparently, public trust will naturally grow. Bangladesh stands at a defining juncture in its financial evolution. The infrastructure for a cashless society is taking shape—driven by mobile connectivity, fintech innovation, and supportive policies. Yet the road ahead demands more than apps and platforms. It requires coordinated efforts to build trust, affordability, and accountability. A cashless Bangladesh is not merely about convenience—it represents a more transparent, efficient, and inclusive financial future. If governance, awareness, and infrastructure align with ambition, the dream of a cashless economy will move from aspiration to achievement—marking a decisive step toward a smarter and more equitable Bangladesh.