Digital Payments Surge in 2024, but MFS Adoption Still Uneven, says Bangladesh Bank

Bangladesh’s payment ecosystem saw remarkable growth and structural transformation throughout 2024, driven by rising digital adoption, major technological advancements, and stronger regulatory oversight, according to the latest Payment Systems Report by Bangladesh Bank (BB).

The report, covering January to December 2024, highlights significant trends across retail, large-value, digital, and paper-based transactions. It also explores global developments that influenced the financial landscape of Bangladesh. Formal payments in Bangladesh are routed through five main BB-operated or regulated platforms: Bangladesh Automated Cheque Processing System (BACPS), Bangladesh Electronic Fund Transfer Network (BEFTN), Bangladesh Real-Time Gross Settlement (BD-RTGS), National Payment Switch Bangladesh (NPSB), and the Interoperable Digital Transaction Platform (IDTP).

Digital Payment Growth in 2024
Digital transactions in Bangladesh saw a notable increase, with the number of digital transactions rising from 366.7 million in December 2023 to 403.13 million in December 2024. The total value of digital transactions grew from Tk 751.4 billion to Tk 763.4 billion. Non-digital transactions, including paper-based payments, also grew substantially, with volumes rising from 346.2 million to 454.9 million, marking a 31.4% increase. Paper-based instruments under BACPS remained significant, clearing 10.42 million instruments worth Tk 11.75 trillion in 2024.

Technological Upgrade of BD-RTGS
The BD-RTGS system underwent a significant technological upgrade in 2024, adopting ISO 20022 messaging standards and introducing separate settlement schedules for Taka and foreign currency transactions. The system processed 5.39 million transactions valued at over Tk 26.72 trillion, reflecting its increasing role in both domestic and foreign currency transfers.

MFS Usage Declines
However, despite the overall growth in digital payments, the Mobile Financial Services (MFS) sector saw a slight decline in digital usage. The share of MFS digital transactions dropped from 46.82% to 40.99%, while its value share also slightly declined from 2.37% to 2.36%. In terms of transaction types, MFS use in 2024 was comprised of 32% cash-out, 30% cash-in, 26% person-to-person transfers, 5% merchant payments, and 3% salary disbursements.

Need for Further Banking System Improvements
Despite growth in money transfers, actual MFS-based payments remain low, especially among small and micro-businesses. AKM Fahim Mashroor, CEO of bdjobs.com, emphasized the need for a more SME-focused banking system to foster greater financial inclusion. He pointed out that bank account penetration in Bangladesh is still lower than in India, where 80-90% of people have access to formal banking. There is a clear need to encourage micro-merchants to adopt MFS more actively, especially for receiving payments.