BB caps NPSB merchant charge at 1% to boost cashless transactions

Bangladesh Bank has capped the maximum charge on merchant payments made through the National Payment Switch Bangladesh (NPSB) at 1%, down from the previous ceiling of 1.5%, aiming to promote digital transactions and reduce costs for small and medium-sized enterprises.

The central bank's Payment Systems Department issued a circular in this regard today (1 July), with immediate effect.

Under the new policy, banks and payment service providers will not be allowed to charge merchants more than 1%, including VAT, as the merchant rate for transactions processed through NPSB.

In practical terms, when a merchant accepts a digital payment from a customer, the bank or payment service provider can deduct a maximum fee of 1% from the transaction value.

The revised charge will apply to merchant payments made through point-of-sale terminals, Bangla QR, and e-commerce platforms under the NPSB network, reads the circular.

The 1% cap covers payments made through bank accounts, debit cards, prepaid cards, credit cards, mobile financial services, and payment service providers using Bangla QR.

According to Bangladesh Bank, establishments that provide digital payment acceptance services to merchants may charge less than 1% as part of promotional campaigns to encourage greater use of digital payments.

The central bank also said the measure is intended to accelerate the country's transition towards a cashless economy by making digital payment acceptance more attractive for merchants of all sizes.

Bankers said the previous 1.5% ceiling discouraged many small businesses from accepting digital payments due to the higher transaction cost.

They believe the lower fee cap, combined with a uniform ceiling across different payment methods, including cards, MFS and bank transfers, is expected to increase the volume of digital transactions.