BB paves way for PayPal, Payoneer-style cross-border payment services
Before launching such services, banks will have to obtain prior regulatory acknowledgement from BB by submitting details of their their partnerships, technology infrastructure, cybersecurity measures and compliance arrangements.
Highlights:
- BB introduces bank-intermediated framework for cross-border digital payments
- Banks can partner with platforms such as PayPal, Payoneer and Stripe
- Digital Value Accounts to facilitate overseas payments and remittances
- Freelancers, exporters and businesses to benefit from new payment system
- Foreign visitors will also be able to make digital payments in Bangladesh
The Bangladesh Bank has introduced a bank-intermediated framework for cross-border digital payments, paving the way for local banks to partner with international payment platforms such as PayPal, Payoneer and similar service providers.
The initiative aims to modernise the country's payment ecosystem, facilitate international trade in services and expand digital financial inclusion.
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In a circular issued today (29 July), the central bank outlined guidelines allowing authorised dealer (AD) banks to offer cross-border digital payment services through partnerships with foreign payment platforms, digital wallets, online payment gateways and other approved payment solution providers, collectively termed cross-border digital payment service providers (CDPSPs).
According to the circular, a key feature of the framework is the introduction of digital value accounts (DVAs), digital wallets or stored-value accounts opened in the name of customers.
However, these wallets will not operate independently. Each DVA must be linked to a Master DVA, or settlement account, maintained by the partner bank to ensure regulatory oversight, fund security and settlement control.
To strengthen transparency and compliance, banks will be required to monitor all transactions in real time through their own systems and maintain a parallel ledger of all DVA transactions. Any unused balance must remain under the bank's control and be refunded or adjusted in accordance with regulatory requirements.
Under the framework, individuals, businesses and freelancers will be able to use the service for a range of approved foreign currency transactions.
DVAs may be used for travel-related foreign exchange under private, medical and official travel quotas, as well as for payments such as visa processing fees, hotel bookings, membership fees and IT-related services.
Users will also be allowed to make small-value international online payments of up to $300 per transaction.
The facility may also be extended against balances held in Export Retention Quota (ERQ) and Resident Foreign Currency Deposit (RFCD) accounts.
For corporate ERQ account holders, up to three senior officials will be permitted to use DVAs for business-related expenses.
The framework is also expected to benefit freelancers and e-commerce entrepreneurs by enabling them to receive overseas earnings more conveniently through regulated digital payment channels.
In addition, foreign nationals and tourists visiting Bangladesh will be able to use the settlement system to make digital payments at local merchant outlets.
Before launching the services, banks must obtain prior acknowledgement from Bangladesh Bank's Foreign Exchange Policy Department by submitting details of their partnerships, technology infrastructure, cybersecurity measures and compliance arrangements.
Participating banks will also be required to comply with anti-money laundering (AML) and customer due diligence (CDD/KYC) regulations and regularly submit transaction reports to the central bank.
The new framework marks a significant expansion of Bangladesh's regulated digital payment infrastructure. Previously, banks were primarily permitted to use online payment gateway service providers (OPGSPs) for inward remittance transactions.
Market observers believe the move could encourage global payment platforms such as PayPal, Payoneer and Stripe to enter the Bangladesh market, particularly to serve the country's growing freelancing, e-commerce and cross-border services sectors.
