Banks can now tie up with payment platforms like PayPal

The Bangladesh Bank has allowed banks to partner with foreign payment platforms to process outward remittances, in a bid to modernise the payment ecosystem and widen digital financial inclusion.

Analysts say the move could draw global payment platforms such as PayPal and Stripe into the Bangladesh market, particularly for freelancing, e-commerce, and cross-border trade in services.

Tap here to add The Daily Star as a trusted source

In a circular issued yesterday, the central bank set out guidelines for authorised dealer (AD) banks to process outward remittances through partnerships with foreign payment platforms and service providers, called Cross-Border Digital Payment Service Providers (CDPSPs).

A core feature of the framework is the introduction of Digital Value Accounts (DVAs) -- digital wallets or stored-value accounts opened in users’ names. These accounts will operate under a Master DVA maintained by the respective bank.

DVAs can be used for travel-related foreign exchange transactions -- private, medical, and official -- as well as payments including membership fees, IT services, visa fees, and hotel bookings. Users can make cross-border online payments up to a specified limit.

The facility may also be extended against balances held in Export Retention Quota (ERQ) accounts, where up to three top-level officials of eligible entities may access DVA facilities for business expenditures, and Resident Foreign Currency Deposit (RFCD) accounts, which allow resident Bangladeshis to hold foreign currency brought back from travel abroad.

Banks must obtain prior clearance from the central bank before launching services, disclosing details of their partnerships, systems, and compliance arrangements.

Banks were previously allowed to use only Online Payment Gateway Service Providers (OPGSPs), which route small-value cross-border payments through intermediary platforms, primarily for inward remittances.