Bangladesh Bank clears way for banks to partner with PayPal, Payoneer

Bangladesh Bank has paved the way for transactions through foreign online payment platforms such as PayPal and Payoneer by introducing a new bank-mediated cross-border digital payment framework.

The new system will allow all banks in the country to partner with international digital payment providers and roll out the services.

The central bank issued a circular on Wednesday, sending the Bank-Intermediated Cross-Border Digital Payment Framework to chief executives of all banks.

It said the initiative aims to facilitate international trade in services, expand digital financial inclusion and modernise Bangladesh's payment ecosystem.

Under the framework, banks may help customers open Digital Value Accounts (DVAs), or stored-value digital wallets, with cross-border payment providers. However, customers will not operate these accounts independently.

Instead, each account must be linked to a bank-controlled master DVA or settlement account. 

Banks have also been instructed to maintain real-time transaction monitoring and parallel ledgers, while any unused funds must remain under the bank's direct control.

The facility will be available to individuals, businesses and freelancers for foreign currency transactions. It can be used for travel expenses, international purchases of up to $300 per transaction, membership subscriptions, IT-related payments, visa processing fees and online hotel bookings.

Companies with Export Retention Quota (ERQ) accounts may authorise up to three senior executives to use DVAs for business expenses. 

Freelancers and e-commerce businesses will also be able to repatriate overseas earnings more easily, while foreign visitors can use the settlement system to pay local merchants.

Banks must obtain Bangladesh Bank approval before launching the service.