Will the dream of cashless banking remain elusive?
Experts estimate that a fully digital financial ecosystem could increase Bangladesh's GDP by nearly 1.7%, potentially adding more than $6.2 billion to the economy each year
We are standing at a historic crossroads. The traditional banking systems that societies have relied upon for centuries are undergoing a profound technological transformation.
In Bangladesh, this shift is increasingly visible in everyday life — from QR code payments at small shops to the rapid growth of mobile financial services.
Yet a critical question persists: Is a "cashless Bangladesh" structurally within reach, or fundamentally constrained by its own economic realities?
Keep updated, follow The Business Standard's Google news channel
From paper to pixels: A brief history
The idea of cashless transactions is not a recent innovation. Its roots stretch back several centuries. In medieval Europe, merchants began using bills of exchange to conduct trade without transporting gold or silver coins. This instrument laid the groundwork for modern non-cash transactions.
The next major shift came in the 1960s with the introduction of automated teller machines (ATMs). Although designed to dispense cash, ATMs did something more significant — they built public trust in electronic banking systems. By the 1990s, the rise of the internet brought online banking into households around the world.
Today, the global financial system has entered a hyper-digital phase. Artificial intelligence, blockchain technologies and real-time payment systems are redefining financial services. Digital banking is no longer a convenience — it has become the core architecture of modern economic infrastructure.
The global benchmark
The global race towards cashless economies is already well underway. Northern Europe stands at the forefront. In Sweden, cash now accounts for only about 10% of in-store transactions, while many businesses in Norway no longer accept physical currency at all.
Asia presents an even more dynamic transformation. China leapfrogged the credit card era by moving directly into mobile QR-based payments through platforms such as Alipay and WeChat Pay. India's Unified Payments Interface has similarly revolutionised digital transactions. By 2025, the Unified Payments Interface accounted for roughly 85% of India's digital payment volume, enabling seamless transfers from street vendors to large retailers.
China leapfrogged the credit card era by moving directly into mobile QR-based payments through platforms such as Alipay and WeChat Pay. India's Unified Payments Interface has similarly revolutionised digital transactions. By 2025, the Unified Payments Interface accounted for roughly 85% of India's digital payment volume, enabling seamless transfers from street vendors to large retailers.
According to the World Bank, digital payments in developing economies have nearly doubled since 2017. The evidence increasingly suggests that a shift towards cashless transactions can accelerate economic efficiency, transparency and growth.
Bangladesh: A nation in transition
Bangladesh is not far behind in this digital transition. The country's financial ecosystem has witnessed remarkable progress in recent years. Digital transactions now account for approximately 47%–56% of overall financial activity, reflecting a steady move away from purely cash-based systems.
The expansion of mobile financial services has been particularly transformative. Platforms such as bKash, Nagad and Rocket have extended financial access to millions who were previously outside the formal banking system.
Recent data illustrates the scale of this transformation. As of December 2025, Bangladesh had approximately 51.8 million payment cards in circulation, including 47.5 million debit cards, 3.4 million credit cards and nearly 0.9 million prepaid cards. Card transactions alone reached about Tk50,044 crore.
Mobile financial services have grown even more dramatically. With more than 239 million MFS accounts, monthly transactions have surpassed Tk1.72 trillion, demonstrating how digital platforms are reshaping financial behaviour across the country.
Experts estimate that a fully digital financial ecosystem could increase Bangladesh's GDP by nearly 1.7%, potentially adding more than $6.2 billion to the economy each year.
Why cash still dominates
Despite this progress, cash continues to dominate everyday transactions. The reasons are complex and deeply rooted in both behavioural and structural realities.
First, there remains a strong cash culture. Paradoxically, the circulation of physical currency continues to grow at an estimated annual rate of around 10%. Many people still feel more secure holding tangible money rather than relying on digital balances.
Second, the digital divide remains a significant barrier. While urban centres like Dhaka are rapidly adopting digital payments, rural areas still face limitations in internet connectivity, smartphone affordability and digital infrastructure.
Third, there is a persistent trust deficit. Cyber scams, phishing attempts and fraudulent OTP schemes have created widespread anxiety, particularly among elderly users who may lack digital literacy.
Finally, many small merchants remain hesitant to adopt digital payments. Transaction fees, concerns about taxation and the simplicity of cash transactions often discourage small businesses from switching to digital systems.
The roadmap to 2030
If Bangladesh hopes to realise the vision of a largely cashless economy, a coordinated strategy will be essential.
First, internet connectivity must become a public utility. Reliable high-speed internet — supported by expanding 5G infrastructure — should be as accessible as electricity, reaching even remote villages.
Second, the financial ecosystem must ensure full interoperability. Customers should be able to transfer funds instantly between banks and mobile wallets through platforms such as the Interoperable Instant Payment System.
Third, financial literacy must be prioritised. Digital safety education should be integrated into school curricula so that future generations can confidently navigate digital finance while protecting themselves from fraud.
Fourth, small merchants need incentives. Reduced transaction fees, tax incentives and the widespread adoption of Bangla QR payment systems could encourage more small businesses to join the digital economy.
Lastly, stronger cyber laws and consumer protection frameworks are essential. Users must have confidence that if fraud occurs, effective legal and institutional mechanisms will ensure swift resolution and restitution.
Final reflections
The transition to a cashless economy is not simply a technological upgrade — it is a transformation in how societies manage trust, transparency and inclusion.
Digital payments can reduce the shadow economy, improve tax collection and channel resources towards national development. They can help finance better infrastructure, stronger public services and expanded economic opportunities.
Bangladesh has already taken meaningful strides in this direction. The rapid expansion of mobile financial services demonstrates the country's capacity to innovate and adapt.
However, technology alone will not determine the outcome. The true currency of a cashless society is trust. The day a small vendor in a remote village feels as secure accepting a digital payment as a physical taka note will mark the moment when the vision of a cashless Bangladesh finally becomes a reality.
M M Mahbub Hasan is a banker, development researcher and author. He can be reached at: mmmahbubhasan111@gmail.com.
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.
