Dhaka: The Policy Research Institute of Bangladesh (PRI), with support from the Gates Foundation, has initiated a groundbreaking research project aimed at enhancing financial inclusion and reducing remittance costs through an Inclusive Instant Payment System (IIPS). This initiative seeks to promote the use of formal financial channels in the country.
According to Bangladesh Sangbad Sangstha, the inception workshop titled "Analysis of the Inclusive Instant Payment System (IIPS) in Bangladesh and Cross-Border Remittance as a Use Case" convened policymakers, officials from Bangladesh Bank, financial sector representatives, and researchers. The focus of the discussion was on the future of interoperable digital payments in Bangladesh.
Chairing the session, PRI Chairman Dr. Zaidi Sattar highlighted that remittances contribute approximately 6 percent to Bangladesh's GDP. He emphasized the necessity of directing these funds towards productive investments and noted the persistent use of informal hundi channels by many Bangladeshi migrant workers, despite the growth of digital financial services.
PRI Research Director Dr. Bazlul Haque Khondker and Director Dr. M.A. Razzaque presented a keynote paper detailing how an Inclusive Instant Payment System could create a seamless, cost-effective payment ecosystem. This system aims to connect banks, mobile financial service providers, and other financial institutions.
The study will evaluate Bangladesh's payment infrastructure, regulatory framework, market incentives, and user behavior. It will incorporate international insights to recommend shared, low-cost payment solutions. Additionally, the research will explore reducing remittance costs through real-time cross-border payment systems and decreasing reliance on informal transfer methods.
As part of the research, PRI plans to survey Bangladeshi migrants in six major destination countries. The survey will investigate their choice of formal or informal remittance channels, considering factors like transaction costs, exchange rates, transfer speed, trust, documentation requirements, and recipients' access to financial services.
Bangladesh Institute of Bank Management (BIBM) Director General Dr. Ezazul Islam expressed that an Inclusive Instant Payment System could significantly lower digital payment costs, boost financial inclusion, and enhance the efficiency and competitiveness of Bangladesh's payment ecosystem. He stressed the importance of robust governance, sustainable pricing, and effective dispute resolution mechanisms for the system's long-term success.
Mohammad Jahid Iqbal, Additional Director of Bangladesh Bank's Payment Systems Department, mentioned that the central bank is developing the IIPS on the open-source Mojaloop platform. This platform aims to reduce costs, enable local customization, and integrate various financial entities into a cohesive digital payment infrastructure. Scheduled to launch in November 2025, it will support feature-phone users, simplify account opening, and bolster fraud prevention through the Tazama toolkit.
Representing the private sector, bKash Vice President Sayed Shaikh Ibna Jilany discussed the integration of mobile financial services into an interoperable payment ecosystem while ensuring consumer protection and affordability.
In his concluding remarks, PRI Distinguished Fellow Dr. Ahsan H. Mansur emphasized the need for a unified national strategy encompassing financial inclusion, the Inclusive Instant Payment System, and Bangladesh's move towards a cashless economy. He highlighted that Bangladesh Bank spends approximately Tk 20,000 crore annually on cash management and advocated for measures to lower transaction costs, increase access to affordable technology, and build trust in the banking system.