BB aims to launch ‘Inclusive Instant Payment System’ by July 2027

Bangladesh Bank (BB) is aiming to launch an Inclusive Instant Payment System (IIPS) by July 2027, introducing a unified digital payment platform that will connect banks, mobile financial service (MFS) providers and other financial institutions to facilitate faster, safer and more convenient transactions across different networks.

The proposed platform is designed to create an integrated payment ecosystem, allowing customers to transfer funds and make payments seamlessly, irrespective of the bank or financial service provider with which they hold accounts or digital wallets.

The initiative is expected to strengthen financial inclusion, reduce reliance on cash, improve payment efficiency and bring more people currently outside the formal banking system into digital financial services.

The system will be developed with technical assistance from the Gates Foundation through its Mojaloop initiative, an open-source software platform that supports interoperable digital financial transactions.

Speaking to BSS, Bangladesh Bank Executive Director Md. Sirajul Islam said the main objective was to bring all financial institutions under a common payment infrastructure, gradually reducing the need for cash withdrawals and transfers between separate service providers.

He said interoperability would allow customers to conduct transactions freely without being restricted to the network of their respective banks or financial service providers.

Once introduced, IIPS is expected to facilitate a wide range of transactions, including person-to-person transfers, merchant payments, business transactions, government disbursements and other financial services.

The platform will enable real-time fund transfers between participating institutions, subject to the necessary operational, settlement and security arrangements.

The initiative builds on Bangladesh's existing digital payment infrastructure, particularly the National Payment Switch Bangladesh (NPSB), which has supported interoperability among participating banks for ATM, point-of-sale and internet banking transactions since 2012.

However, the existing system has struggled to bring all major financial service providers under a single network, particularly mobile financial service operators and non-bank institutions.

Under an earlier initiative, banks, MFS providers and payment service providers were instructed to facilitate interconnected transactions.

The central bank fixed maximum transaction charges, including VAT, at 0.15 percent for banks, 0.20 percent for MFS providers and 0.85 percent for payment service providers, while prohibiting fees for recipients.

However, limited participation from several major MFS operators prevented the arrangement from achieving its intended coverage.

Acknowledging the shortcomings of the existing framework, Sirajul Islam said a more comprehensive technological infrastructure was necessary to ensure broader participation across the financial sector.

The proposed IIPS is expected to overcome these limitations by encouraging wider institutional participation and establishing a common platform for seamless transactions.

Beyond domestic payments, the system could also open new opportunities for improving the distribution of international remittances.

In July 2026, the Policy Research Institute of Bangladesh (PRI), with support from the Gates Foundation, launched a research initiative titled "Analysis of the Inclusive Instant Payment System (IIPS) in Bangladesh and Cross-Border Remittance as a Use Case."

The study brought together policymakers, central bank officials, financial sector representatives and researchers to explore how the proposed system could promote financial inclusion, lower remittance costs and encourage the use of formal financial channels.

PRI Chairman Dr Zaidi Sattar highlighted the importance of remittances to Bangladesh's economy, noting that they contribute around six percent of the country's gross domestic product (GDP).

He emphasised the need to channel these inflows through formal financial institutions and encourage their use in productive investment.

Researchers believe interoperable payment infrastructure could make domestic remittance distribution faster and more efficient.

With appropriate links to authorised international remittance networks, IIPS could allow overseas transfers to reach beneficiaries' bank accounts and mobile wallets more quickly and potentially at lower costs.

However, introducing cross-border services would require additional arrangements involving international partnerships, foreign exchange regulations, payment settlement mechanisms and connectivity with authorised overseas networks.

The proposed platform could also deliver economic benefits beyond individual users.

Sirajul Islam said wider adoption of digital payments would reduce the expenses associated with printing, transporting, storing and managing physical currency.

Businesses could benefit from lower cash-handling costs, improved accounting systems and more efficient financial transactions. The government could also use the platform to streamline the distribution of salaries, allowances, subsidies and social safety net payments.

Bangladesh's digital payment ecosystem has expanded considerably in recent years, supported by the rapid growth of mobile financial services, internet banking, electronic fund transfers and QR-code-based payments.

Despite this progress, fragmented payment networks continue to create barriers to seamless transactions between different service providers.

Through IIPS, Bangladesh Bank aims to address these structural limitations by establishing a common infrastructure and creating a more accessible, interconnected and inclusive financial system.

However, the platform's success will largely depend on the participation of major financial institutions, technological reliability, cybersecurity, affordable transaction charges and public confidence in digital financial services.

If successfully implemented, IIPS could transform Bangladesh's payment landscape by making financial transactions more accessible, efficient and transparent while encouraging greater participation in the formal economy.

The targeted July 2027 launch is expected to mark a significant step towards establishing a unified and inclusive digital financial ecosystem in Bangladesh.