Bangla QR gains ground, but risks remain

Illustration:TBS

Shapla, a leatherworker, runs a small roadside shop under a canopy. In front of him sits a box filled with ink, brushes and colourful shoe soles. Customers come by to polish or repair their shoes.

A Rocket QR code is placed on the box. Customers can pay Shapla for his services by scanning it through their mobile banking app. At first glance, there is little to suggest that a small roadside cobbler is part of Bangladesh's rapidly expanding digital payment ecosystem.

Yet QR-based transactions are becoming increasingly common across the country. From neighbourhood shops and roadside stalls to restaurants, service providers and large retailers, Bangla QR is steadily changing how consumers pay.

The appeal is straightforward. Customers do not need to carry cash, payments can be made quickly, and merchants can receive money directly through bank or mobile financial service (MFS) accounts. The interoperable system also allows customers to pay merchants using different banks and MFS platforms.

The growth has accelerated in recent months. Bangladesh Bank made Bangla QR mandatory for proprietorship businesses from July 1, requiring banks and MFS providers to install the national QR code for merchants.

The number of Bangla QR merchants has now reached around 37.5 lakh nationwide, according to Bangladesh Bank data. The network spans small shops in rural areas as well as large businesses and service providers in urban centres. A single merchant can also receive Bangla QR codes from multiple banks and MFS providers.

Bangladesh Bank has introduced financial incentives to encourage transactions through the system. For Bangla QR-based NPSB transactions of up to Tk2,000, the acquiring institution can receive 0.10% of the transaction amount, capped at Tk2, while the issuing institution can receive 0.20%, capped at Tk4. The incentives go to participating institutions, not directly to customers or merchants.

But the rapid expansion has brought new concerns.

Customers can face problems when money is transferred to the wrong account, deducted without reaching the merchant, or processed twice. Failed transactions and lengthy dispute-resolution processes can also undermine confidence in digital payments.

Former Bangladesh Bank governor Ahsan H Mansur said Bangla QR was an important initiative, but safeguards were necessary to prevent misuse.

"Bangla QR is something we have to embrace, but at the same time we have to prevent its abuse," he said.

Mansur said there was no single solution to the challenges and that they would have to be addressed "piece by piece". He also stressed the importance of maintaining a single national QR standard accessible to customers and institutions across the financial system.

Another concern is artificial or inflated transactions.

According to industry experts, if QR transactions do not represent genuine sales, rising payment volumes may not indicate a corresponding increase in real economic activity. Inflated transaction records could also affect lending decisions, as banks and financial institutions increasingly use digital transaction histories to assess merchants' business activity and creditworthiness.

A business with artificially inflated QR transactions could appear financially stronger than it actually is, potentially affecting credit decisions. Genuine digital transactions, however, can help small merchants build a financial history and improve access to formal credit.

Bangladesh Bank Executive Director and spokesperson Arief Hossain Khan said the central bank had not received any formal complaint from stakeholders about abuse of Bangla QR. He said the matter would be investigated if such activity was taking place.

As Bangla QR expands, the challenge is no longer simply getting merchants and customers to use it. The system will also need reliable transactions, faster dispute resolution and effective safeguards to ensure that the growth of digital payments translates into greater trust in a cash-light economy.