Bangladesh Bank tightens ‘add money’ transfers from bank cards to MFS accounts

First-time token transaction is now mandatory, with no extra step needed if card and MFS account match

Bangladesh Bank has introduced stricter safeguards for adding money to mobile financial service (MFS) accounts using bank cards, in a bid to curb rising fraud involving cash-in transactions.

The central bank announced the measures on Tuesday, saying that the new system will come into effect from Aug 1.

Under the new rules, when funds are added to an MFS account from another person’s debit or credit card, users must first complete a token transaction of up to Tk 500 as a temporary verification step.

Once successful, the card will be linked to the MFS account, after which regular transactions can be carried out 24 hours later.

Officials said the move follows a series of recent fraud incidents involving card-to-MFS transfers.

A central bank official said the step is aimed at ensuring that such transactions remain secure before enabling full access.

However, if a customer uses their own card to “add money” into their own MFS account, and the account is already verified in the cardholder’s name, the token requirement will not apply.

The circular, sent to chief executives of banks and MFS providers, also states that such transfers must now be classified as “fund transfer” instead of “merchant payment”.

While debit and prepaid card-based “add money” transactions will remain free of charge, credit card transactions will incur fees ranging between 1 and 2 percent depending on the issuer.

The central bank also said MFS accounts receiving card-based add money must be visible to the card issuer at the time of transaction.

If this system is not ensured by Jul 31, such transactions will be blocked from Aug 1.

Bangladesh Bank Executive Director Arief Hossain Khan said the move has been taken as part of efforts to “prevent fraud”, noting that the central bank has received complaints of money being transferred from customers’ cards to different MFS accounts through fraudulent “add money” operations without their knowledge.

Explaining the rationale behind the tightening of rules, he said: “In addition, under the current system, card service providers do not have any information about the beneficiary MFS account holder.

“As a result, if any erroneous transaction or fraud occurs, it becomes difficult for the card issuer to determine which MFS account the money has gone into.”

He added that once the circular is fully implemented, fraud committed through “add money” transactions is expected to reduce significantly.