Advancing Towards a Cashless Society: Digital Financial Payment System Growth and Policy Actions for a Future Smart Bangladesh
Keywords:
Cashless Society, Digital Payment, Financial Inclusion, Internet Banking, Payment Systems, Smart BangladeshAbstract
This study examines the expansion and composition of digital financial payments in Bangladesh and distinguishes transaction growth from evidence of cash substitution. Secondary monthly data from three Bangladesh Bank statistical tables cover July 2024–June 2025. Descriptive statistics, endpoint growth rates, linear time trends, Pearson correlations, and exploratory ordinary least squares regressions are supplemented by residual diagnostics, robust standard errors, and sensitivity analyses. Internet banking customers increased by 28.8%, transaction numbers by 73.5%, and nominal transaction value by 26.8%; average value per transaction declined by 26.9%. Card-channel value increased by 18.8%, while the separate issued-card transaction series increased by 18.9%. ATM and cash recycling machine transactions accounted for an average 88.0% of monthly card-channel value, compared with 12.0% for POS and e-commerce. Internet banking volume and value were strongly correlated (r = .955), but diagnostic checks identified non-normal trend residuals, heteroskedasticity in the POS regression, and influential observations. Twelve monthly observations cannot establish recurring seasonality, long-run relationships, or causal effects. The study contributes a measurement distinction between access, recorded usage, and merchant-oriented settlement; it does not demonstrate an economy-wide reduction in cash use. Policy implications include monitoring active merchant payments, transaction reliability, and consumer outcomes alongside account and card issuance. These priorities require evaluation with longer time series and direct evidence on cash payments.
References
Aguilar, A., Frost, J., Guerra, R., Kamin, S., & Tombini, A. (2024). Digital payments, informality and economic growth (BIS Working Papers No. 1196). Bank for International Settlements. https://www.bis.org/publ/work1196.pdf
Aurazo, J., & Franco, C. (2024). Fast payment systems and financial inclusion. BIS Quarterly Review, March, 41. https://www.bis.org/publications/fast-payment-systems-and-financial-inclusion
Bangladesh Bank. (n.d.). Time series data [Dec’18–Jul’25] [Data set]. Retrieved November 3, 2026, from https://www.bb.org.bd/econdata/fin_digitalfstat/fidfs_time_series_data.xlsx
Committee on Payments and Market Infrastructures, & World Bank Group. (2016). Payment aspects of financial inclusion. Bank for International Settlements. https://www.bis.org/cpmi/publ/d144.pdf
Frost, J., Koo Wilkens, P., Kosse, A., Shreeti, V., & Velásquez, C. (2024). Fast payments: Design and adoption. BIS Quarterly Review, March, 31–44. https://www.bis.org/publications/fast-payments-design-and-adoption_1.pdf
Hasan, M. M., Mukta, R. T., Rayhan, Z., & Das, I. R. (2024). Adoption and impact of cashless payment systems in rural Bangladesh: Challenges, opportunities, and policy implications. Social Science and Management, 1(3), 39–47. https://doi.org/10.61784/ssm3029
Huda, S. S. M. S., Rimthi, R. R., Islam, T., & Mowla, S. M. (2024). Adoption of cashless economy in Bangladesh. Journal of Information Technology Teaching Cases. Advance online publication. https://doi.org/10.1177/20438869241279586
Islam, M., Tamanna, A. K., & Islam, S. (2024). The path to cashless transaction: A study of user intention and attitudes towards quick response mobile payments. Heliyon, 10(15), Article e35302. https://doi.org/10.1016/j.heliyon.2024.e35302
Karim, M. W., Chowdhury, M. A. M., & Haque, A. K. M. A. (2022). A study of customer satisfaction towards e-wallet payment system in Bangladesh. American Journal of Economics and Business Innovation, 1(1), 1–10. https://doi.org/10.54536/ajebi.v1i1.144
Organisation for Economic Co-operation and Development. (2025). Safeguarding consumers’ access to cash in the digital economy: Policy considerations and approaches (OECD Business and Finance Policy Papers No. 81). OECD Publishing. https://doi.org/10.1787/189970b4-en
Park, M. C., Manalili, I., Magtoto, T., Martinez, R., Solis, J., & Chua, C. (2022). Contactless payments in travel and tourism in Philippines: From a technological acceptance model. American Journal of Economics and Business Innovation, 1(2), 23–33. https://doi.org/10.54536/ajebi.v1i2.264
Sultana, N., Alam, S. M. S., & Bokhari, R. P. (2025). Exploring cashless technology continuance among SME entrepreneurs: An integrated approach with sustainability mediation and demographic moderation. Journal of Innovation and Entrepreneurship, 14, Article 70. https://doi.org/10.1186/s13731-025-00522-8
World Bank. (2021a). Considerations and lessons for the development and implementation of fast payment systems. https://fastpayments.worldbank.org/sites/default/files/2021-11/Fast%20Payment%20Flagship_Final_Nov%201.pdf
World Bank. (2021b). The use of quick-response codes in payments. https://fastpayments.worldbank.org/sites/default/files/2021-10/QR_Codes_in_Payments_Final.pdf
World Bank. (2025). Bangladesh: Digital Service Transformation for Access and Resilience (P511786): Project information document (PID), concept stage. https://documents1.worldbank.org/curated/en/099082525075018894/pdf/P511786-217b9237-beb0-4051-8209-a09ab443d4f9.pdf
