The floor economy

We Bangladeshis love being unique, usually in the wrong direction. We speak of governance “of the people, by the people, for the people”, then regulate as if service providers prepared the draft, proofread it, and blessed it for their spiritual welfare.

In most markets, when a charge hurts consumers or merchants, the regulator sets a ceiling. Nobody may charge more. We have discovered a more creative instrument: the floor. Nobody may charge less.

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Bangladesh Bank’s July 1 instruction reportedly fixed a minimum Merchant Discount Rate, or MDR, of 1 percent for Bangla QR merchant payments. Not a maximum. A minimum. The ceiling was already in force from an earlier circular; pricing now has both floor and roof, a corridor guarded at both ends. Just when the country was being mobilised to scan one national QR code, the regulator ensured nobody could make it cheaper.

This should sound familiar. Bangladesh already holds the rare honour of a telecom voice-call floor price, a policy the world has survived without copying. Now, payment floors. Soon, perhaps, a minimum price for oxygen to protect the cylinder industry.

India made UPI merchant payments free from January 2020. The result was adoption, not chaos: over 241 billion transactions in FY2026 and 731 million QR codes. Small payments became a daily habit, not a slogan.

Pakistan, from a weaker base, pushes Raast QR the same way: free for merchants, subsidised where needed. Sri Lanka learnt the hard way; once its governor admitted LankaQR progress was “insufficient”, Colombo scrapped merchant fees below Rs 5,000 in April 2026.

And then there is Bangladesh, arriving at the digital future with an entry ticket.

Bangla QR reportedly processed Tk 22 crore in its first two mandatory days. Impressive, until one remembers MFS cash-out alone moves around Tk 1,500 crore a day. Cash-out is not digital payment; it is cash payment with a toll plaza in the middle, collecting around 1.85 percent.

The floor protects the business model that cheap interoperable payments threaten. Reportedly, some banks were acquiring QR merchants at Tk 7 to Tk 9 per thousand. A 1 percent floor makes that competition illegal. The tea-stall owner now pays at least Tk 10 per thousand when cash costs nothing.

Who wins? MFS cash-out wins; cashless transactions lose. Even banks and PSPs lose, because at Tk 10 per thousand the cashless pie never grows. The durable winner is the largest incumbents’ cash-out economy.

Brazil’s Pix is free for individuals and low-cost for merchants. Singapore’s SGQR and Thailand’s PromptPay made QR payments habitual. Build usage first; monetise later through lending, analytics and merchant services. Do not tax the payment before the habit is born.

The demand is simple: make every transfer free, for everyone. Bangla QR, bank to bank, bank to wallet, wallet to wallet, person to merchant. Reimburse providers from the state’s vast savings on printing, moving and guarding cash; let them earn from value-added services, not from punishing digital payment.

And the logic? If acquiring truly costs more than Tk 8 per thousand, no bank would offer Tk 8. And if cashback may lower the effective cost, why ban lower pricing? If cashback is acceptable, the floor is a theatre.

No nation has floor-priced its way to a cashless economy. Bangladesh will move forward; it always does, usually despite policy support. Yet a central bank that relieves thousands of crores in defaulted interest and lends afresh to failed borrowers discovers discipline only when the beneficiary is the ordinary consumer or merchant.

For defaulters, there is mercy in wholesale. For tea-stall owners, rickshaw pullers, students, farmers and small merchants, the foundation of the economy, there is a QR code with a minimum charge. In our financial system, compassion is syndicated; digital inclusion is retail.

The writer is the founder of BuildCon Consultancies Ltd and BuildNation Ltd