BB unveils digital payment framework for foreign transactions

Bangladesh Bank (BB) has introduced a new bank-intermediated digital payment framework aimed at modernising cross-border digital payments, enhancing digital financial inclusion, and expanding service trade.

According to a circular issued by the central bank on Wednesday (July 29), Authorised Dealer (AD) banks have been allowed to facilitate outward remittances through agreements with foreign payment platforms and service providers. These entities are collectively referred to as Cross-Border Digital Payment Service Providers (CDPSPs).

Under the new framework, provisions have been made to introduce Digital Value Accounts (DVAs), which will function as digital wallets or stored-value accounts. These individual accounts will operate under a Master DVA managed by the respective bank.

The circular states that foreign currency expenses related to personal, medical, and official travel can be processed through DVAs. In addition, payments can be made for various approved purposes, including membership fees, IT service charges, visa fees, hotel bookings, and limited-value online e-commerce transactions.

The circular also specifies that the facility will be available against balances held in Retention Quota and Resident Foreign Currency Deposit (RFCD) accounts.

However, banks must obtain prior approval from Bangladesh Bank before launching such services.

The initiative is being viewed as a significant step toward integrating cross-border digital payments into the formal financial system. Previously, banks were largely limited to facilitating inward remittances through online payment gateways.

According to market stakeholders, once implemented, the framework will make international transactions smoother for freelancers, e-commerce businesses, and service exporters. It could also pave the way for global digital payment platforms such as PayPal and Stripe to expand their operations in Bangladesh.