Cashless economy must not become incomeless: Debapriya Bhattacharya

Economist Debapriya Bhattacharya has cautioned that Bangladesh's push toward a cashless economy must not lead to economic exclusion, particularly for those in the informal sector. “A cashless economy should not become an incomeless economy,” he said, stressing the need for inclusive digital financial systems.

Debapriya Bhattacharya, honorary fellow at the Centre for Policy Dialogue (CPD), made these remarks while presenting the keynote at the Cashless Bangladesh Summit 2025, held at the Sonargaon Hotel in Dhaka.

The event was jointly organized by the Institute of Cost and Management Accountants of Bangladesh (ICMAB) and MasterCard.

Highlighting critical challenges, Debapriya pointed out that around 85% of transactions in Bangladesh are still cash-based, and 60-70% of the population works in the informal sector. He warned that unless rural and marginalized communities are brought into the digital fold, the benefits of a cashless economy will remain limited.

He also underscored the need to address not just technological but social and infrastructural barriers. A coordinated national strategy is essential, he said, involving banks, fintech, telecom companies, and policymakers.

The government has set a target for 75% of transactions to go digital within five years, and initiatives are underway, including revisions to procurement laws, data protection policies, and the launch of a digital bank. However, Bhattacharya emphasized that policy simplification and reduced bureaucratic hurdles are key to success.

He proposed three specific measures: Formulating a structured proposal integrating all recommendations on the cashless economy; Developing a comprehensive action plan with involvement from the Planning Commission; Establishing a Bangladesh Bank-led task force to monitor and evaluate progress.

Debapriya also called for diversifying the payment ecosystem and expanding Mobile Financial Services (MFS) usage beyond deposits and withdrawals, especially in informal markets like roadside shops.

“Digital transformation must be inclusive. Without engaging the informal economy, true progress will be elusive,” he concluded.