PISP: The next big leap in Bangladesh’s digital payment

A New Kind of Simplicity

Ever felt the frustration of online checkout? You are shopping, and suddenly you are juggling cards, PINs, or switching between apps just to make a payment. Bangladesh may be digital, but it is not yet simple.

Now imagine this: you click "Pay", and it is done. The money moves instantly and securely from your chosen account – bank or mobile financial service (MFS) – through a single interface. This is not a futuristic dream; it is the next phase of Bangladesh's fintech advancement, powered by Payment Initiation Service Providers (PISPs).

Bangladesh Bank's draft Payment System Operators Regulation, 2025 includes, for the first time, a dedicated licensing provision for Payment Initiation Service Providers (PISPs). Bangladesh already has the infrastructure in place. The National Payment Switch Bangladesh (NPSB) connects banks and MFSs, while services like bKash and Nagad have made digital transactions commonplace. PISPs are the intelligent layer that will make this network seamless, fast and inclusive.

One gateway, total control

A licensed PISP acts as a secure intermediary that can initiate payments directly from a user's bank or mobile financial services (MFS) account – with explicit consent – through encrypted APIs. For consumers, this creates a smoother and more controlled experience.

It offers unified access, allowing users to manage all their financial accounts from a single app rather than juggling multiple platforms. Security is also strengthened through consolidated authentication powered by Strong Customer Authentication (SCA), providing better protection with fewer passwords. Additionally, customers of smaller banks can connect through a PISP, ensuring they are not left out of the wider digital ecosystem.

Overall, PISPs transform digital finance into a single, secure command centre – finally making it as effortless as it ought to be.

Boost for businesses

For merchants and entrepreneurs, PISPs offer far more than convenience; they open the door to significant opportunities. Frictionless payments, including one-click checkout, can reduce cart abandonment and increase e-commerce sales. Unified bill management allows customers to pay utilities, subscriptions and various fees from a single dashboard, enhancing overall user experience.

PISPs also enable instant B2B and government transfers, where low-cost Account-to-Account (A2A) payments help streamline supply chains, payroll and social safety net disbursements. With user consent, real-time transaction data can support smarter credit services such as Buy Now, Pay Later (BNPL) and personalised credit offerings. Additionally, PISPs can monetise their APIs by offering payment infrastructure to fintechs and enterprises as a service.

These revenue streams – from transaction fees and analytics tools to credit products – make the PISP model both sustainable and highly scalable.

Global Lessons, Local Readiness

Around the world, the model has proven its value. In India, Google Pay, PhonePe and Paytm process billions of transactions monthly. In Europe, firms such as TrueLayer, Plaid and GoCardless have built billion-dollar businesses under the PSD2 framework.

Across the Middle East and Africa, open banking is expanding rapidly – proof that PISP-driven systems are both viable and transformative.

Bangladesh is well-positioned to follow. Interoperability has already connected financial institutions; now PISPs will serve as the smart bridge transforming those links into a unified, inclusive ecosystem.

The three pillars

For this transformation to succeed, three key pillars must guide the journey. The first is security, which requires end-to-end encryption and strong authentication to safeguard both data and funds. The second is system readiness, meaning that financial institutions must be prepared to support API-driven, real-time transactions. The third pillar is consumer awareness, ensuring that users understand how to manage consent and protect their credentials. These are not barriers; they form the essential foundations of trust and widespread adoption.

Globally validated and technologically mature, Payment Initiation Service Providers could represent Bangladesh's next major leap in digital finance. They offer simpler user experiences, greater inclusion and fresh business opportunities for all stakeholders.

With the infrastructure and regulations already in place and a proven global blueprint to follow, the question is no longer whether Bangladesh will adopt this model – only how quickly the nation can position itself to lead the next wave of financial innovation.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.