How Fintech is driving payments innovation in Bangladesh

FinTech has played a key role in revolutionising payments in Bangladesh, driving change mainly through the following ways:

1. Popularity of mobile payments

• Leadership of bKash: As the largest mobile financial services provider in Bangladesh, bKash reaches a large number of unbanked people by enabling money transfers, payments and savings services through mobile phones.
• Government cooperation in Nagad: Nagad, in partnership with the postal sector, offers low-cost account opening and instant services, accelerating the process of financial inclusion.

2. Digital banking and the correspondent banking model

• Branchless banking: Through Agent Banking, financial institutions use local agents to provide access to money, remittances and other services in rural areas.
• Digital Wallet Integration: Combine traditional banking with digital wallets to enhance user convenience.

3. Cross-border payment optimisation

• Blockchain technology pilot: Explore blockchain to reduce the cost and time of overseas labour remittances (e.g. Malaysia-Bangladesh corridor).
• RocketCompetition from other services has driven down fees.

4. Regulatory sandboxes support innovation

Bangladesh's central bank has launched a test environment allowing businesses to experiment with new payment solutions such as biometric authentication, balancing risk and innovation.

5. QR code and contactless payment

Dhaka and other cities gradually roll out code-sweeping payments, small merchants start accepting themUpayand other platforms for QR code payments.

Challenge:

• network coverageImpact on use in remote areas
• user educationOngoing investment needed to increase trust

The future is expected to further deepen financial inclusion with the expansion of 5G and the adoption of AI wind control.

Fintech Deepens Future Path of Payment Innovation in Bangladesh

With the initial success of mobile payments and digital banking, fintech development in Bangladesh is entering a deeper phase of change. The following are key trends and potential breakthroughs for the future:

1. Artificial Intelligence (AI) and big data-driven personalised financial services

• Intelligent Risk Control: Using AI to analyse user transaction data to detect fraud (e.g. bKash has started piloting machine learning models).
• Credit Scoring Innovation: Microfinance for people without credit through non-traditional data such as mobile phone usage records, bill payment history, etc. (similar to India)Jai Kisan(Mode).
• Chatbot Banking Services: Local businesses such as Dutch-Bangla Bank have launched AI customer service to reduce labour costs and improve efficiency.

2. Central Bank Digital Currency (CBDC) exploration

• The Central Bank of Bangladesh (CBB) has initiated a research project on "Digital Taka" to test the application of wholesale CBDC for inter-bank settlement.
• Potential advantages: Reduce cross-border remittance delays, reduce cash dependence (cash still accounts for more than 20% of GDP).

3. The Rise of the SuperApp Ecosystem

Local platforms such asPathao(Travelling + Paying),ShopUp(B2B services for small and medium-sized merchants) is integrating payment functions to form a "one-stop" portal to the digital economy.

📌 case (law): The success of AirAsia's BigPay in Malaysia suggests that a combined e-commerce/social super-wallet could be the next growth area.

4. Extension of biometric payments

• Fingerprint/Face AuthenticationGradual replacement of PINs (Nagad has piloted this in some scenarios).
• Aadhaar-style National ID system tied to payments can further streamline the KYC process.

5. Experimental combination of DeFi and financial inclusion

Despite strict regulations, some startups try to solve it with blockchain technology:
✅ Agricultural supply chain financing--Farmers get fast harvest advances through smart contracts
✅ P2P lending platform compliance--Reference to IndonesiaAkseleranmodalities

⚠️ challenge: Central banks are wary of cryptocurrencies and need to balance innovation and risk.

▶▶ Pending problem:

🔮 future outlook

If 5G coverage reaches 60% by 2026 (from about 30% today), coupled with a young demographic dividend, Bangladesh could replicate Kenya's M-Pesa-style "leapfrog" and even become one of the global benchmarks for fintech in emerging markets.