Digital payments cost 28 times less than cash transactions: BB

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Cash transactions cost Bangladesh’s economy an estimated Tk 1.70 trillion annually, around 28 times the Tk 59.64 billion cost of digital payments, according to a Bangladesh Bank study.

The report, titled The Cost of Cash Study in Bangladesh: A Comparative Analysis of Cash and Digital Payment, estimated that cash-related expenses accounted for 3.24% of Bangladesh’s GDP in 2023, compared with 0.11% for digital payments.

The annual per capita cost was estimated at Tk 9,938 for cash transactions and Tk 348 for digital payments.

Bangladesh Bank Executive Director Md Sirajul Islam said cash management involves substantial expenses, including printing, transporting, distributing and replacing damaged banknotes. Wider use of digital payments could reduce these costs and help curb corruption, theft and financial misuse by making transactions more traceable, he added.

According to the study, banks bear Tk 368 billion in annual cash-related costs, while consumers incur Tk 280 billion. Bangladesh Bank’s own cash-related expenses were estimated at Tk 4 billion annually.

The study also estimated revenue losses linked to the shadow economy at Tk 933 billion, equivalent to 1.77% of GDP. Even excluding these losses, cash transactions cost the economy around 12 times more than digital payments.

However, Bangladesh’s digital payment ecosystem faces challenges. It generates an estimated Tk 23 billion in annual revenue against costs of Tk 59.64 billion, leaving a gap of Tk 36.64 billion.

High merchant fees, delayed settlements, limited interoperability, unreliable internet connectivity and concerns about fraud and failed transactions continue to discourage adoption. Limited digital literacy also remains a barrier.

Despite the growth of mobile financial services and electronic transfers, cash still accounts for more than 80% of transaction volume across different use cases, the study found.

The report said small businesses are particularly sensitive to digital transaction fees, which can reduce narrow profit margins. Wider adoption will require affordable services, reliable connectivity, clearer payment procedures and stronger consumer protection.

Bangladesh Bank has promoted Bangla QR as a national standard for interoperable digital payments. From October 1, 2026, the central bank introduced a zero-per-cent interchange reimbursement fee for Bangla QR transactions to encourage merchants to adopt the system.

The study concluded that reducing reliance on cash could lower costs and improve financial transparency. However, progress will depend on making digital payments accessible, affordable, reliable and trustworthy for consumers and businesses.