International payment card networks, including Visa, Mastercard, American Express and UnionPay, might soon be required to register as companies in Bangladesh to continue operating here under new regulations drafted by the central bank.
At present, these global card schemes operate from abroad. They maintain liaison or representative offices in Bangladesh, not locally incorporated companies, which means they are not fully under domestic tax rules.
Bangladesh Bank's newly drafted Payment System Operator (PSO) Regulation, 2025 would change that by making it mandatory for foreign card networks to register under the Companies Act 1994 if they want to keep operating in Bangladesh.
The draft also states that all such international card schemes must apply to Bangladesh Bank for a licence within six months of the regulation coming into force.
Bangladesh Bank prepared the draft under the Payment and Settlement System Act, 2024, which requires all card networks, domestic or foreign, to be licensed and regulated within the country.
A senior Bangladesh Bank official, requesting anonymity, said the move aims to bring these companies under the local tax system. Since they currently operate through representative offices, they do not pay corporate taxes on income generated from Bangladesh.
Visa, Mastercard, American Express, UnionPay, Diners, JCB and others provide card network services to banks and financial institutions in the country. They earn fees, such as Interchange Reimbursement Fees (IRF), from Bangladeshi banks. But these payments are made from overseas Nostro accounts (foreign currency accounts held abroad) and routed to their global headquarters.
As a result, the official said, the money does not appear in local financial statements and stays beyond the National Board of Revenue's tax jurisdiction.
"Although the services are being used inside Bangladesh, the earnings are booked overseas," he said. "This creates both a regulatory and taxation gap."
However, an official representing an international card network told The Daily Star that Bangladesh's transaction volume is still relatively small, and the requirement could discourage global operators. If major players withdraw, he warned, local cardholders may suffer.
Local bankers are also urging caution.
"Of course, we must prioritise the country's interest above everything else. However, we must also remember that in trying to earn one taka, we should not end up losing ten," Syed Mahbubur Rahman, managing director and CEO of Mutual Trust Bank, told The Daily Star.
Rahman, also a former chairman of the Association of Bankers, Bangladesh (ABB), said there must be proper stakeholder consultation before enforcing such regulations.
"We should examine what practices exist in other countries," he said. "While imposing these obligations, we must ensure we do not lose our business partners, because many are already leaving the country."
According to central bank officials, once these card schemes are incorporated locally, they would have to open local bank accounts, report earnings from transactions inside Bangladesh and pay corporate tax as required by national law.
Bangladesh's card payment market has grown substantially in recent years, with millions of debit and credit cards linked to international networks. Banks use these platforms to settle domestic and cross-border transactions, generating notable fee income for the card schemes.
As of August, Bangladesh Bank data show 4.49 crore debit cards, 30.08 lakh credit cards and 99.94 lakh prepaid cards in circulation. Visa and Mastercard remain the most widely used networks for cross-border payments, followed by American Express, UnionPay, Diners and JCB.