Bangladesh Bank plans to phase out Bangla QR merchant charges

Bangladesh Bank Governor Mostakur Rahman has announced plans to gradually reduce the Merchant Discount Rate (MDR) for Bangla QR transactions to zero in a bid to encourage digital payments among businesses.

The central bank also plans to establish a Tk 100 crore subsidy fund to support small merchants in adopting digital payment systems.

The governor made the announcement on Thursday while responding to questions from students during a discussion titled "Bangla QR Framework and the Role of Bangladesh Bank in Financial Inclusion" at BRAC University.

Rahman said Bangladesh Bank is preparing to launch an instant payment system next year, which will make operator-to-operator transactions faster and more seamless. He also outlined a long-term vision of integrating all financial accounts under a "One Citizen, One ID, One Wallet" framework.

To make digital payments more accessible, the central bank is conducting surveys to identify solutions for people without Android smartphones. It is also working on enabling app-based payment services that can function without an internet connection.

The announcement comes after Bangladesh Bank made Bangla QR mandatory for app-based interoperable payment services from July 1 and introduced a minimum 1% service charge on merchant transactions. The fee drew criticism from businesses, prompting the central bank to consider subsidies to ease the financial burden on small merchants.

Launched in 2023, Bangla QR is now connected to 37 banks, while banks and mobile financial service (MFS) providers have installed around 2.3 million Bangla QR codes across the country.

Bangladesh Bank has also warned that institutions failing to implement the system within the stipulated timeframe could face fines of up to Tk 3 million.