Bangla QR Faces Trust Test as Fraud Risks Shadow November 1 Launch

Bangladesh Bank’s plan to introduce person-to-person (P2P) transfers through Bangla QR from November 1 promises faster money transfers between bank accounts and mobile financial service (MFS) wallets. 

But, experts warn, unless the central bank can guarantee robust safeguards, transparent charges and swift redress for victims of failed or fraudulent transactions, the initiative could struggle to win the public trust essential for its success.

A Bangladesh Bank working paper on QR-based payments identified uneven technological readiness, limited merchant adoption, low public awareness, trust concerns and continued dependence on cash as obstacles to wider adoption. It recommended incentives for low-value transactions, stronger digital infrastructure and a more unified instant-payment system.

These concerns underline the need for sustained public education. A senior banker heading a digital banking operation said, “People need to become accustomed to QR-based payments through sustained awareness campaigns.”

Customers must understand how to share QR codes safely, verify recipients and report suspicious activity. The service should also provide accessible complaint channels and timely updates when transactions are delayed or disputed.

With banks, MFS providers, payment service providers (PSPs) and payment system operators instructed to upgrade their applications by October 31, the countdown to the launch has begun. 

The central bank has directed participating institutions to enable customers to generate personal QR codes, scan codes or upload QR images received through messaging applications.  Yet installing the technology is only the first hurdle. The far greater challenge is ensuring that customers can transfer money across financial platforms without fearing fraud, unexpected charges or the loss of funds.

Bangladesh Bank spokesperson Arief Hossain Khan has said a unified QR code will eliminate the risk of transferring money to the wrong account because of a mistyped digit. But removing typing errors does not remove the risks of digital payments. 

Customers can still be deceived into scanning a fraudster’s code, transactions can fail, and disputes can arise over responsibility when money is debited but never reaches its intended recipient. A senior banker said the public trust will depend not on how quickly the system launches, but on how effectively it protects customers when something goes wrong.

The proposed use of Public Key Infrastructure and digital signatures can strengthen QR authentication and protect against code manipulation. However, technical authentication alone cannot prevent social engineering, in which customers are tricked into authorising payments to unintended recipients.

“Every transaction should therefore display the recipient’s name and masked account or wallet number prominently before final approval”, said a technology professional working in a private bank. “Uploading a QR image must never trigger an automatic payment, and customers must be able to cancel a transaction before authorization”.

Experts say banks and MFS providers must also deploy effective fraud monitoring, secure authentication and systems to identify suspicious transactions. At the same time, Bangladesh Bank should require participating institutions to establish clear procedures for mistaken transfers, unauthorised payments and failed transactions, with defined investigation deadlines and transparent refund arrangements where applicable.

A particularly damaging scenario would arise when a sender’s account is debited but the recipient receives nothing. Customers should not be left shuttling between a bank and an MFS provider, each blaming the other. The central bank must clearly assign responsibility for investigating such cases, communicating with customers and resolving disputes.

Without enforceable accountability, even a small number of unresolved cases could undermine confidence in the entire payment system.

Pricing transparency will be equally important. Cash-outs through existing mobile wallets can cost Tk13�"Tk18.50 per Tk1,000, depending on the provider and channel. Direct transfers could reduce costs if customers avoid cash withdrawals, but the actual savings will depend on the fees charged for each payment route.

A senior Bangladesh Bank official has said the new facility will follow existing inter-institutional transfer charges rather than introduce a separate fee structure.

The central bank must ensure that customers can see the applicable fee before confirming a transaction. Charges should be clearly disclosed for bank-to-bank, bank-to-MFS and MFS-to-bank transfers, preventing unexpected deductions from eroding the appeal of digital payments.

The central bank’s October 31 deadline must demand evidence of operational readiness, not merely software upgrades. Banks and payment providers must test transfers across different institutions, verify recipient identification, ensure accurate transaction records and establish reliable settlement and reconciliation procedures.