Bangladesh Bank sets 1% minimum MDR for merchant payments under NPSB
The central bank said acquiring institutions will be allowed to run promotional campaigns to encourage digital transactions.
Bangladesh Bank has set a minimum Merchant Discount Rate (MDR) of 1% for merchant payments processed through the National Payment Switch Bangladesh (NPSB), in a move aimed at boosting digital transactions across the country.
In its latest directive issued today (1 July), the central bank also kept the maximum MDR unchanged at 1.15%, creating what officials describe as a more predictable pricing framework for digital payment acceptance.
The revised structure will apply to merchant transactions made through point-of-sale (POS) terminals, Bangla QR and e-commerce platforms operating under the NPSB network.
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Under the new rules, merchant payments via Bangla QR–using bank accounts, debit and prepaid cards, credit cards, mobile financial services and payment service providers–will be subject to a minimum MDR of 1%, with applicable value-added tax (VAT) charged separately where relevant.
The central bank said acquiring institutions will be allowed to run promotional campaigns to encourage digital transactions. As part of these initiatives, acquirers may offer cashback and other incentives to merchants.
Bangladesh Bank said the revised MDR structure is expected to lower effective transaction costs for merchants compared with the existing framework, while encouraging wider adoption of digital payment systems.
Bankers said the combination of a defined floor and ceiling rate would improve pricing stability in the merchant acquiring market.
They also expect payment service providers and acquiring banks to introduce targeted incentives to expand merchant onboarding and usage of digital channels.
