What are the advantages and disadvantages of using Bangladesh Payments?

When using payment platforms (e.g. bKash, Nagad, Rocket, etc.) for transactions in Bangladesh, the local financial environment and technical conditions need to be considered. Below is an analysis of the main advantages and disadvantages:

cutting edge

  1. High financial inclusion coverage

    • The penetration of mobile payments (especially bKash) is over 50%, which solves the problem of lack of traditional banking services, and allows users in rural areas to complete money transfers, bill payments, etc. via mobile phones.

  2. Government policy support

    • The Central Bank of Bangladesh promotes a "cashless society", offering tax incentives (e.g., reduced fees) for digital payments and approving platforms such as Nagad to expand services through the postal network.

  3. Localised Scenario Adaptation

    • It supports small and high-frequency transactions (e.g. food market purchases), phone bill top-ups, tuition fee payments and other livelihood needs, and some platforms allow unbanked users to top up through cash at the agent's point of sale.

  4. Cross-border remittance facilitation

    • In partnership with Western Union and others, remittances from overseas workers can be credited directly to mobile wallets (which account for about 6% of GDP in remittance income), arriving quickly and at a lower cost than traditional channels.

  5. Technological innovation attempts

    • Nagad launches facial recognition for account opening and Rocket pilots blockchain cross-border settlement, reflecting the industry's active embrace of new technologies.

inferior

  1. Infrastructure constraints

    • Network coverage is only 70% (World Bank data), and transactions often fail in remote areas due to signal interruption; unstable power supply affects the use of terminal equipment.

  2. Regulatory risks highlighted

    • The central bank's requirement that all payment platforms transfer customer funds to state-owned banks by 2024 could make liquidity management more difficult; tighter anti-money laundering scrutiny has led to delays in account opening.

3.Security breaches are frequent

  • SIM card fraud accounts for 65% of digital payment fraud cases (Dhaka Police Report 2022); lack of secondary authentication on some platforms and high risk of social worker attacks.

4. Insufficient interoperability

  • Transfers between bKash/Nagad/Rocket require a bank gateway, with fees as high as 1.5%; the unified QR code standard has not yet been fully implemented.

5. Cash dependency inertia

  • WorldBank statistics show that 851 TP3T of retail transactions are still in cash, and that electronic payment refusals are common among micro and small merchants (to avoid 21 TP3T of VAT).

Typical Scenario Suggestions

  • ✅Suitable for: urban micro-transfers, remittance receipts, utility payments
  • ❌ Use with caution: large trade settlements (single day limit usually Tk 200,000 ≈ $1,800), highly time-sensitive payments

New entrants are advised to prioritise access to bKash (market share 75%), but are required to pre-deposit margins to cope with central bank compliance reviews. At the same time to retain the cash withdrawal channel to adapt to user habits.

Plus: In-depth analysis of Bangladesh's payment ecosystem and hands-on advice

1. Segment Players Comparison

flat-roofed building market share Core strengths Major limitations
bKash ~75% - More than 250,000 agents
- Visa co-branded card supports international payments
- API interfacing is mature (e.g. Uber Bangladesh)		 - Cumbersome KYC process (biometrics required)
- Higher fees for corporate accounts (1.81 TP3T)
Nagad ~20% - Government background, postal outlets covering rural areas
- "Zero Balance" accounts to attract low-income people
- Zero-fee promotional strategy for P2P transfers		 - Frequent system downtime (cumulative 12-hour outages in 2023)
- QR Code Payment for Loyalty Merchants Only
Rocket (DBBL) ~5% - DBBL bank direct connection, more secure for large transfers
- SME loan origination channel consolidation		 - Poor App user experience (need to SMS OTP every login)

2. Solutions to key pain points for B-end users

  • Cross-border trade collections:
    Prefer bank channels over wallets (such as Eastern Bank Ltd's EDI system) to avoid:

    • bKash has a single foreign trade collection limit of Tk 500,000 (≈ US$4,500)
  • POS terminal deployment costs:
    Local vendor 'mCash' offers low-cost Android POS (Tk 300 per month) with customised anti-hijacking firmware pre-installed.

3. C-user behavioural insights

  • Typical usage patterns::
# Alternatives in the absence of DeFi application scenarios

if user.is_urban.

    Uses = ["Takeaway Payments", "Online Shopping", "Staged Shopping"] # Foodpanda/Pathao has access to bKash

elif user.is_rural:

    Uses = ["Diaspora Receipt", "Seed Fertiliser Procurement"] # Nagad Exclusively with BRAC Co-operative Society
  • confidence bottleneck::
    72% users still favour "cash-in/cash-out" (WorldBank study), suggesting platform design:
+ "Top-up Cashback" incentive 

+ "Failed Transaction Refund in Seconds" promise

4. Regulatory sandbox dynamics

The central bank is testing it:
✅ CBDC Phase 1 Pilot (Wholesale Digital Currency, for interbank settlements)
⚠️ USSD Non-Smartphone Payment Standard Delayed (originally scheduled for 2024Q1)

[Action guide] New market entry strategies

1️⃣ Compliance first: Registration must be done through the Bangladesh Payment System Act 2009 PSO licence and is expected to take 14 months.

2️⃣ Localised Adaptation::

# UI design must include.

- [x] Bengali language priority display 

- [x] Night mode auto-darkening during Ramadan

3️⃣ Redundant Architecture: Deployment of a standby server cluster in Chittagong to cope with flood risk in Dhaka data centre.