BB scraps Bangla QR fee, offers incentives to small merchants

Highlights:

• Zero interbank charges on Bangla QR transactions from 1 Oct
• Merchants to get incentives on Bangla QR-based NPSB payments
• Acquiring institutions to get Tk1 per Tk1,000, issuing institutions Tk2 per Tk2,000
• No transaction charge on Tk1,000 Bangla QR payment for customer, merchant
• Transaction splitting, cash-outs, other misuse to be monitored
• No incentives for failed or disputed transactions

The Bangladesh Bank has waived the Interchange Reimbursement Fee (IRF), or interbank charge, on all transactions made through Bangla QR code as part of efforts to expand digital payments in the country.

As a result, card-issuing institutions and the merchant's payment acquiring institutions will no longer be able to levy any fee or service charge as IRF on these transactions, according to a central bank circular issued today (10 August).

All banks, mobile financial services (MFS), and payment service providers and operators have been asked to comply with the new rule.

Earlier, on 1 July, the central bank set a minimum Merchant Discount Rate (MDR) of 1%, including VAT, for merchant payments via Bangla QR.

However, it has now withdrawn the fee following demands from stakeholders and concerns that the additional charge was negatively impacting market transactions.

Meanwhile, in a separate circular issued today, Bangladesh Bank also announced cash incentives to merchants for National Payment Switch Bangladesh (NPSB) transactions made via Bangla QR at merchant points, covering each payment of up to Tk2,000.

Under this facility, acquiring institutions will receive a 0.10% incentive (Tk1 per Tk1,000), while issuing institutions will get 0.20% (Tk2 per Tk1,000) on a monthly basis.

This directive will come into effect for all Bangla QR transactions from 1 October.

This means that if a customer pays Tk1,000 at a shop by scanning a Bangla QR code, no transaction charge will be deducted by either the customer's or the merchant's bank.

The circular emphasised that transactions must not be deliberately split into smaller amounts to exploit the incentive facility. Furthermore, no incentives will be provided for failed, cancelled, reversed, refunded, chargeback, or disputed transactions.

Acquiring institutions have been instructed to monitor and verify any abnormal or unusually high number of transaction patterns at merchant points. They must also take preventive measures against artificial transaction splitting, cash-outs, or any other misuse of the system.

Bangladesh Bank reserves the right to audit relevant transaction, merchant, settlement, and incentive records. Any incorrect or excess incentives disbursed will be recovered or adjusted against future payments, according to the circular.

The central bank stated that this initiative aims to simplify merchant payments, integrate micro and marginal entrepreneurs into the digital payment ecosystem, and establish a secure, affordable, and interoperable digital payment system.