Bangladesh Bank forms Tk 100 crore incentive fund to cut Bangla QR transaction costs

Bangladesh Bank has set up a Tk 100 crore incentive fund to promote cashless transactions across the country and encourage small and marginal businesses to adopt Bangla QR payments.

The initiative, which will take effect on October 1, is expected to reduce transaction costs for banks and mobile financial service (MFS) providers while making Bangla QR payments more affordable for small-scale merchants and service providers.

The central bank’s Payment Systems Department issued a circular on Monday outlining the new incentive scheme. The fund was approved at the 451st meeting of the Bangladesh Bank Board of Directors as part of efforts to expand Bangla QR transactions during the 2026-27 fiscal year.

Under the scheme, incentives will be provided for transactions of up to Tk 2,000 at shops operated by individually registered small and marginal merchants and service providers.

The acquiring institution, the bank or MFS provider that installs the QR code at the merchant’s point of sale will receive an incentive equivalent to 0.10% of the transaction value.

Meanwhile, the issuing institution, the bank or MFS provider through whose app the customer makes the payment will receive 0.20% of the transaction value as an incentive.

Although Bangla QR has been identified as an effective tool for expanding cashless payments in Bangladesh, small businesses have been reluctant to use it because of transaction fees. With profit margins often low, merchants viewed the existing fees of around 1% to 1.15% as an additional financial burden and therefore preferred cash transactions.

The Bangladesh Bank said the new incentive scheme aims to ease this burden and help build a stronger digital payment ecosystem across the country.

In a separate circular, the central bank also decided to completely abolish the Interchange Reimbursement Fee. Previously, 0.35% to 0.70% of the transaction value from the overall 1% to 1.15% fee had to be paid to the customer’s bank or MFS provider.

The removal of the fee is expected to significantly reduce the cost of Bangla QR transactions for merchants and allow acquiring institutions to offer more affordable payment services.

However, Bangladesh Bank has imposed strict conditions to prevent misuse of the incentive scheme. Transactions cannot be split into multiple smaller payments to obtain a higher incentive. No incentive will be provided for failed, refunded or disputed transactions.

-HIS