Going Cashless: A path towards sustainable growth

“Going digital” has dramatically changed the way we live and work, becoming an essential part of our everyday lives. We shop for clothes online, plan vacations through travel portals, order food with apps, and even split bills with friends through wallets—all thanks to the digital transformation.

Over the past few years, this shift has extended to how we handle payments. In Bangladesh, digital payments are becoming increasingly popular, with people using them for everything from paying bills to making online purchases. This shift from cash to cashless methods—such as cards, QR codes, and online payments—has been rapid and transformative. As more consumers experience the benefits of cashless payments, they’re embracing the convenience and security it offers. Gone are the days of hunting for spare change—digital payments are faster, easier, and safer, with built-in fraud prevention features that cash simply can’t match.

Data from Bangladesh Bank highlights the growth of digital payments, especially card usage. From February 2020 to February 2023, the value of point-of-sale (POS) card transactions grew by 58%, touching a whopping Tk 2,392 crore. Similarly, online payments surged 3.3 times during the same period, reaching Tk 1,072 crore.

One of the most exciting developments in this shift is the rise of contactless payments. Introduced in 2018 for credit cards in Bangladesh, contactless payments now allow cardholders to pay by simply tapping their cards—whether they’re using credit, debit, or prepaid cards—for purchases up to Tk 5,000. No need for a PIN or two-factor authentication. It’s quick, safe, and efficient. The government is even working towards making 75% of transactions in Bangladesh cashless by 2027, which could help boost the economy and reduce issues like tax evasion and corruption.

Contactless payments have already proven their value in other countries, speeding up transactions and reducing long queues at places like transit stations, quick-service restaurants, and fuel stations. In Bangladesh, the government’s push for “Cashless Bangladesh” is gaining momentum, encouraging businesses—from large enterprises to micro-vendors—to embrace digital payments. Visa is also helping by partnering with local companies to make digital payments more accessible and to align with Bangladesh’s Smart Bangladesh vision.

The growth of e-commerce in Bangladesh has also been key to the adoption of digital payments. Online retailers have quickly embraced these payment methods, making it easier for consumers to get comfortable with digital transactions. Many merchants even offer special incentives, like cash-back offers, during festive seasons to encourage people to pay digitally.

Government-backed incentives, like waivers on VAT, and cashback offers for both consumers and merchants, can help encourage even more widespread use of cashless payments. Public transport is another area where digital payments could make a big impact. Imagine a connected transport system where commuters could easily pay their fares using contactless technology. Visa is already exploring ways to make payments more seamless for metro rail and bus users.

The shift to digital payments could play a major role in improving financial inclusion in Bangladesh. By making financial services more accessible, it can help people build credit histories, access loans, and ultimately boost economic growth. According to the Better Than Cash Alliance, digital payments could increase Bangladesh’s GDP by 1.7% each year.

Despite the challenges—like infrastructure gaps and limited access to digital services in rural areas—the move toward a cashless society in Bangladesh is gathering pace. With more government support, better infrastructure, and the rapid expansion of e-commerce, it’s only a matter of time before digital payments become the go-to method for all consumers.

For this transformation to succeed, everyone—government, businesses, and consumers—needs to play their part. The government must invest in digital infrastructure and digital literacy, businesses should ensure their services are accessible to everyone, and consumers need to embrace digital payments with confidence.

By doing so, Bangladesh can move closer to becoming a more inclusive and prosperous nation, with a future powered by digital payments.