BB unveils draft regulation for payment system operators

Staff Reporter :

Bangladesh Bank (BB) has released the draft Payment System Operator (PSO) Regulation 2025, aiming to align the framework with the Payment and Settlement Systems Act, 2024.
The draft has been published for public feedback, and a committee will finalise it after consultations with industry stakeholders.

Under the draft, PSOs must maintain sufficient balances in their Trust and Settlement Accounts (TSA) at the end of each business day to cover all merchant liabilities.

Any shortfall will incur penalties, calculated as the lower of Tk30 lakh or the prevailing Standing Lending Facility (SLF) rate, currently 11.50 percent.

If the shortfall persists for more than 14 days, an additional Tk10,000 per day will apply. Directors, CEOs, and treasury officers will be personally liable for any TSA deficiency.

PSOs act as intermediaries, facilitating acquiring, processing, clearing, and settlement of payment transactions, but they are prohibited from issuing e-money.

All settlements must be processed through scheduled commercial banks. Currently authorised PSO services include merchant acquiring, ATM acquiring, and payment switching, with major operators in Bangladesh including SSLCOMMERZ Ltd, shurjoPay, IT Consultants Ltd, aamarPay, and PayStation.

To qualify for a licence, companies must be incorporated under the Companies Act 1994, with payment services explicitly mentioned in their Memorandum of Association.

The licensing process involves two stages: obtaining a No Objection Certificate (NOC) and then the main licence. The application fee is Tk50,000, and the licence fee is Tk5 lakh. Licensed PSOs must begin operations within 120 days.

Minimum capital requirements vary by service type, from Tk1 crore for digital merchant acquiring to Tk20 crore for ATM/CRM operations. Additionally, PSOs must maintain ongoing capital proportional to their transaction volumes: 0.3percent of average monthly volume for merchant acquiring and payment initiation, and 0.1percent for switching, ATM, and card services. Boards must have at least five members, with two-thirds non-executive directors, and the chairman must also be non-executive.

Directors should have at least five years of professional experience, meet integrity standards, and cannot hold positions in other PSOs or be loan defaulters.

CEOs must hold a graduate degree, five years of relevant experience (including two years in senior roles), and require BB approval, including background checks and a CIB report.

PSOs must complete KYC verification for all merchants, maintain written settlement agreements, and ensure settlements within five working days; cash settlements are prohibited.

ATM and CRM outlets must be secure and accessible, with downtime limits of 12 hours in urban and 24 hours in rural areas, monitored centrally.

A comprehensive risk management framework covering liquidity, operational, fraud, custody, and anti-money laundering risks is mandatory.

Sponsor shareholders cannot transfer shares within five years without BB approval. PSOs will undergo both on-site and off-site inspections.

Customer charges require prior BB approval, and all transaction data must be retained for at least 12 years. Any major operational incident must be reported within 24 hours, and data breaches within 72 hours.

The draft regulation is a significant step to strengthen governance, operational oversight, and risk management in Bangladesh’s growing digital payment ecosystem.