BB Launches Interoperable Payment System Without bKash and Nagad.

On 1 November, Bangladesh Bank (BB) launched the long-awaited interoperable payment system, enabling instant transfers between mobile wallets, bank accounts, non-bank accounts, and institutional accounts. However, the system went live without the participation of two market leaders in the Mobile Financial Services (MFS) sector, bKash and Nagad.

bKash, the largest MFS provider, requested an extension until 31 January, citing security concerns over integration with the system. Nagad, the second-largest operator, was excluded altogether due to its lack of a formal licence, despite operating under BB’s administration since August 2024.

The interoperability system went live with only three of the 13 MFS providers: Islami Bank mCash, Rocket (operated by Dutch-Bangla Bank), and Islamic Wallet (operated by Al-Arafah Islami Bank). Among banks, only six joined initially, including Islami Bank, BRAC, Eastern, Pubali, MTBL, and Al-Arafah Islami Bank, with other banks to follow once testing is complete.

Arif Hossain Khan, Executive Director at Bangladesh Bank, described the system as “theoretically” operational, as the absence of bKash and Nagad means it lacks full functionality. He expressed frustration over bKash’s last-minute delay, questioning whether their unwillingness to integrate is related to pricing power as the market leader.

The central bank had set a transaction price of Tk8.50 for interoperability, which is higher than proposed rates from some operators but slightly below bKash’s suggested Tk9.50. If successful, the interoperable system could also threaten bKash’s lucrative cash-out business, where it currently charges Tk18.50 per Tk1,000 withdrawn, higher than Nagad’s fee of Tk12.50.

In response, bKash’s head of corporate communications, Shamsuddin Haider Dalim, stated that the company has taken necessary steps to integrate with the system, focusing on robust authentication and security measures to ensure smooth transactions.

Nagad’s exclusion, despite being prepared for the interoperability rollout, has raised concerns. Arif Hossain Khan explained that Nagad was excluded for operating without a licence, though he acknowledged that a decision would be made after consulting with the Governor. Nagad, however, questioned the fairness of the exclusion, pointing out that it had participated in all discussions on interoperability, including pricing.

Since the regime change in August 2024, Nagad has continued operating under a temporary licence issued by Bangladesh Bank. Despite this, the exclusion of Nagad from the interoperability system has raised questions about the fairness of its treatment compared to other providers.

Muhammad Zahidul Islam, head of media and communication at Nagad, expressed disappointment that the service had not been launched despite their preparedness. He confirmed that Nagad would implement interoperability immediately once it receives official approval.