BB Caps Bangla QR MDR at 1% for Government Payments

Bangladesh Bank (BB) has capped the maximum Merchant Discount Rate (MDR) at one percent, including VAT, for government revenue and fee collection through the Bangla QR payment system to promote affordable and wider use of digital payments. The central bank's Payment Systems Department-2 issued a circular today directing that the new rate will apply to all government payments made through the National Payment Switch Bangladesh (NPSB) using Bangla QR.

The one percent MDR ceiling will cover transactions made through bank accounts, debit and prepaid cards, credit cards, Mobile Financial Services (MFS) accounts and Payment Service Provider (PSP) accounts. According to the circular, the move is aimed at making digital payments for government services more cost-effective while accelerating the expansion of the Bangla QR ecosystem.

The directive supplements PSD Circular No. 01/2023, issued on February 6, 2023, which fixed payment rates for POS and e-commerce transactions. The latest instruction specifically addresses QR-based government payments. Bangladesh Bank also allowed acquiring banks and financial institutions to undertake promotional campaigns to encourage greater use of Bangla QR for government fee and revenue payments. The circular has instructed all scheduled banks, Mobile Financial Services providers, Payment System Operators and Payment Service Providers to implement the directive with immediate effect.