Bangladesh’s transition toward a cashless economy presents what the Foreign Investors’ Chamber of Commerce & Industry (FICCI) describes as a dual reality, marked by both clear opportunity and persistent structural constraints. While digital infrastructure, fintech innovation and smartphone penetration have risen rapidly in recent years, a range of socioeconomic barriers continues to slow mass adoption across the country. The landscape, according to the report, is one of notable progress layered against significant gaps — a glass that appears half full or half empty depending on where one stands, FICCI said in a recent report.

A key constraint is the structure of Bangladesh’s labour market. Nearly 85% of the population works in the informal sector, with most residing in rural regions where access to smartphones, stable mobile networks and digital financial tools remains limited. Even when people are willing to adopt digital solutions, their choices are constrained by the dominance of a small number of mobile financial service (MFS) providers. Concerns about fraud further dampen confidence; the report notes that one in ten MFS users has experienced some form of fraudulent activity. These patterns reinforce a preference for cash, which continues to dominate transactions across sectors.

Interoperability — the ability to transact seamlessly across platforms — is another weak point. Although the infrastructure for interoperable digital payments exists, usage remains low and often inconsistent. Many users and merchants remain unaware of interoperable services or lack trust in them, while others continue relying on cash because it feels simpler and more secure. This dependence is reflected in the country’s financial systems: banks spend an estimated Tk 260 crore annually on cash handling, and the government prints Tk 20,000 crore worth of currency each year. Such figures underscore the enduring demand for physical money and the logistical burden of maintaining a cash-heavy economy.

Despite these challenges, the FICCI report stresses that Bangladesh possesses strong foundations for progress. Over the past decade, the country has made rapid gains in connectivity, digital literacy initiatives, and financial innovation. Mobile and smartphone penetration has increased substantially, enabling millions of people to access digital services that were previously out of reach. The rise of fintech firms and the expansion of MFS platforms have connected remote communities to basic financial tools, creating new digital pathways for payments, savings and transfers.

FICCI notes that transitioning to a cashless system is not merely a matter of adopting new technology; it marks a fundamental shift in how individuals and businesses engage with the economy. A cashless ecosystem is defined as one in which payments and transactions occur digitally — through mobile wallets, bank cards, QR codes and online banking — rather than through physical notes and coins. For Bangladesh, such a shift promises several compelling advantages.

Digital financial services remain a powerful lever for financial inclusion. Millions of people who lack access to traditional banking services can quickly be brought into the formal financial system through mobile platforms. This is particularly crucial in rural areas where brick-and-mortar bank branches are scarce. As more people engage in digital transactions, they gain access to secure storage for money, transparent transaction histories and low-cost payment options.

Digital payments also enhance transparency and accountability. By reducing the use of cash, governments and businesses can curb theft, leakage, corruption and tax evasion. Every digital transaction creates a traceable record, improving governance and enabling data-driven decision-making. For consumers, digital payments reduce the risks associated with carrying large amounts of cash and provide greater convenience in day-to-day activities, from grocery shopping to paying school fees or utility bills.

The report further highlights the social empowerment potential of a cashless economy. Women in rural and peri-urban areas can use mobile wallets to manage their finances independently, receive remittances securely and participate more actively in the economy. Young people, freelancers and gig workers benefit from instant payments and improved access to digital marketplaces, enabling entrepreneurship and entry into global value chains. Farmers and rural communities can receive payments directly for their produce, bypass intermediaries and gain access to microcredit and insurance products that rely on digital records.

Businesses, too, stand to gain from the shift. Digital payments widen market access, allowing enterprises to reach customers beyond local geography. E-commerce, social media retailing and delivery services all depend on efficient cashless transactions. Transaction histories create credit records that can help small and medium-sized enterprises secure loans and attract investors. Digital systems reduce the costs associated with cash handling, improve inventory accuracy and contribute to a more seamless customer experience.

Yet FICCI emphasises that for Bangladesh to fully realise the benefits of a cashless economy, concerted efforts are needed across policy, industry and society. Digital literacy remains a significant barrier, particularly in rural regions where many users struggle to navigate apps or online services. Infrastructure gaps — from patchy internet coverage to insufficient cybersecurity frameworks — must be addressed to ensure safe and reliable transactions. Trust in digital platforms must be strengthened through fraud protection, clear grievance redressal mechanisms and consistent service quality.

Regulation will play a decisive role. The country requires robust data protection laws, clearer interoperability standards and incentives to encourage digital adoption among both consumers and merchants. Government services, subsidies and tax systems must increasingly be digitalised to promote behavioural change. Meanwhile, private-sector players must focus on user-centric innovation and broader merchant onboarding, while civil society groups can support capacity building and awareness campaigns. International organisations can contribute through technical support, best-practice sharing and investment in digital infrastructure.