Dhaka:Bangladesh Bank (BB) is aiming to launch an Inclusive Instant Payment System (IIPS) by July 2027. This unified digital payment platform is designed to connect banks, mobile financial service (MFS) providers, and other financial institutions to enable quicker, safer, and more convenient transactions across different service networks.
According to Bangladesh Sangbad Sangstha, the proposed system aims to create an integrated payment ecosystem that allows customers to seamlessly transfer money and make payments regardless of their bank or financial service provider affiliations.
The initiative is expected to expand financial inclusion, reduce reliance on cash, improve payment efficiency, and extend digital financial services to those outside the formal banking system. The platform's development will receive technical support from the Gates Foundation through its Mojaloop initiative, an open-source software platform for interoperable digital financial transactions.
BB Executive Director Md. Sirajul Islam stated that the primary objective is to connect all financial institutions through a common channel, reducing the need for cash withdrawals and transfers between different service providers. He emphasized that interoperability would ensure customers are no longer restricted to transactions within their own bank or financial service provider's network.
Once operational, the IIPS is expected to support a wide range of transactions, including person-to-person transfers, merchant payments, business transactions, government disbursements, and other financial services. It will allow funds to move directly between participating institutions in real-time, subject to operational, settlement, and security arrangements.
This initiative builds on Bangladesh's existing payment infrastructure, particularly the National Payment Switch Bangladesh (NPSB), which has facilitated interoperability among banks for ATM, point-of-sale, and internet banking transactions since 2012. However, the current framework has struggled to bring all major financial service providers under a common network, especially MFS operators and non-bank institutions.
An earlier arrangement required banks, MFS providers, and payment service providers to facilitate interconnected transactions, with set maximum transaction charges and prohibitions on recipient charges. Despite this, participation from some major MFS operators remained limited, preventing the arrangement from reaching its full potential.
Islam acknowledged the existing system's shortcomings and highlighted the need for a more comprehensive technological framework. The IIPS is expected to address these issues by encouraging broader institutional participation and establishing a common infrastructure for transactions across the financial sector.
Beyond domestic payments, the platform could improve the distribution of international remittances. In July 2026, the Policy Research Institute of Bangladesh (PRI), supported by the Gates Foundation, launched a research initiative to analyze the IIPS's potential in Bangladesh and cross-border remittances.
PRI Chairman Dr. Zaidi Sattar noted the significance of remittances, which account for around six percent of Bangladesh's GDP, and stressed the need to channel these inflows through formal financial institutions. Researchers identified interoperable payment infrastructure as a means to enhance domestic remittance distribution efficiency.
With appropriate connections to authorized international remittance networks, the IIPS could facilitate quicker and potentially cheaper overseas transfers to beneficiaries' bank accounts and mobile wallets. However, such services would require international partnerships, foreign exchange regulations, payment settlement mechanisms, and connectivity with authorized overseas networks.
The proposed system's benefits could extend beyond individual customers. Islam stated that increased digital payment usage could reduce the costs of managing physical currency, while businesses could benefit from lower cash-handling expenses and improved transactions. The government could also streamline salary, allowance, subsidy, and benefit distributions through digital channels.
Bangladesh's digital payment landscape has grown significantly with the rise of mobile financial services, internet banking, electronic fund transfers, and QR-code-based transactions. However, fragmented payment networks have hindered seamless transactions between different providers. By establishing a common platform, Bangladesh Bank aims to overcome these barriers and create a more accessible financial system.
The success of IIPS will depend on major financial institutions' participation, the technology's reliability and security, affordable transaction costs, and public confidence in digital services. If implemented effectively, the system could reshape Bangladesh's payment landscape, enhancing financial access and efficiency while supporting transparency and broader economic inclusion. The July 2027 launch target marks a significant milestone in Bangladesh's efforts to develop a unified digital financial ecosystem.