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Bangladesh Bank has set the interchange reimbursement fee (IRF) at zero for all transactions made through Bangla QR in a bid to popularise digital payments.

The central bank has also introduced an incentive scheme for small and marginal merchants and service providers to encourage low-value transactions through Bangla QR.

The decisions will come into effect on October next, according to two separate directives issued by the Payment Systems Department of Bangladesh Bank on Monday.

Under the new directives, the IRF for all types of Bangla QR-based transactions has been set at zero. As a result, the issuing institution will not receive any fee or service charge from the acquiring institution for Bangla QR transactions.

The banking regulator said the measures aim to facilitate merchant payments, bring small and marginal sellers of goods and services under the digital payment network, and establish a secure, affordable and interoperable digital payment ecosystem.

Meanwhile, the central bank is launching a new incentive programme to boost Bangla QR transactions.

Under the scheme, incentives will be provided for each Bangla QR-based NPSB transaction of up to Tk 2,000 conducted at merchant points of small and marginal sellers and service providers onboarded through individual retail accounts.

The acquiring institution will receive an incentive equivalent to 0.10 per cent of the transaction value, while the issuing institution will receive 0.20 per cent.

However, institutions will not be allowed to artificially split a single transaction into multiple smaller transactions, engage in transaction structuring to inflate transaction volumes, or adopt any other method to obtain the incentive.

No incentive will be paid for failed, reversed, refunded, charged-back, disputed or subsequently cancelled transactions, according to the circular.

The central bank may, if necessary, verify and audit transaction records, merchant-related information, settlement data and supporting documents of the concerned institutions. The institutions will have to provide such information and documents upon request from the BB.

If an institution is mistakenly paid incentives against excessive, artificial or erroneous transactions, Bangladesh Bank may recover the amount or adjust it against future incentive payments.

The acquiring institution will also be required to monitor, verify and review any merchant showing an unusually high number or unusual pattern of transactions.

The central bank has instructed acquiring institutions to take necessary measures to prevent artificial transaction splitting, cash-out and other forms of misuse.

If such abuse is established, the concerned institution will be held responsible. Bangladesh Bank may also recover or adjust the incentives already paid and take necessary action under the Payment and Settlement Systems Act, 2024.

The latest directives also state that previous instructions relating to fees and charges for Bangla QR transactions will be considered amended or repealed to the extent applicable.