Global payment networks such as Visa, Mastercard, American Express (Amex), and UnionPay have been operating in Bangladesh for years without paying taxes on the income generated locally - a loophole created by their non-resident operational structure. Instead of registering as companies, these providers run activities through liaison or representative offices, allowing them to avoid Bangladesh’s corporate tax regime and remain outside the National Board of Revenue’s (NBR) direct oversight.
To fix this long-standing gap, Bangladesh Bank has drafted the Payment System Operator (PSO) Regulation-2025, making it mandatory for foreign card networks to register as domestic companies under the Companies Act 1994. The draft also requires them to obtain a Bangladesh Bank licence within six months once the regulation becomes effective. “They earn over Tk 200 crore a year - but pay no tax here”: A senior Bangladesh Bank official told Daily Industry that international card networks collect more than Tk 200 crore annually from Bangladeshi banks in inter-change reimbursement fees (IRF) and various other charges. But instead of routing the earnings through local accounts, the companies channel the funds from banks’ nostro accounts straight to their global headquarters.
“Since their earnings are booked abroad, the revenue never enters Bangladesh’s financial statements,” the official said. “The services are used here, the revenue is generated here, but the tax is avoided because the income is shown overseas. This has created a clear gap in both regulation and taxation.”
The central bank also noted that, unlike commercial banks and NBFIs who regularly submit transaction data, Visa, Mastercard and Amex never submit transaction records to Bangladesh Bank. The lack of transparency has raised major concerns tied to AML/CFT (anti-money laundering and counter-terrorism financing) compliance.
Despite repeated requests over the years, the networks have “consistently ignored” instructions to submit transaction data, Bangladesh Bank officials confirmed.
Card networks resist new rules
Industry insiders report that representatives of at least one major international card network have been opposing Bangladesh Bank’s new conditions, arguing that Bangladesh’s transaction volume is relatively low compared to global markets. They believe that strict compliance requirements may “discourage global operators” from continuing operations in the country. Their key argument: tougher regulations could reduce competition and ultimately hurt consumers.
Banks welcome move, push for consultation: Commercial banks, however, say the government’s move is necessary for transparency and proper revenue collection.
Syed Mahbubur Rahman, Managing Director and CEO of Mutual Trust Bank, told Daily Industry: “The national interest has to come first. Bringing these global card networks under registration will ensure transparency and proper tax contribution. But before enforcement, regulators must have discussions with all stakeholders.”
Bankers argue that if international payment networks are allowed to operate without regulatory accountability while local companies face strict compliance burdens, it creates inequality in the financial ecosystem.
Why Bangladesh Bank is pushing back now: Bangladesh Bank says accurate reporting of card transactions is becoming increasingly important as digital payments expand rapidly. According to the latest central bank data: 4.49 crore debit cards, 30.8 lakh credit cards,
99.94 lakh prepaid cards are currently in circulation in Bangladesh. Visa and Mastercard still dominate international transactions, followed by Amex, UnionPay, Diners Club, and JCB. With cross-border e-commerce and digital payments rising sharply, regulators believe they must ensure that global networks play by the same rules as domestic operators.
What changes once the new regulation is enforced: Under the proposed PSO Regulation-2025, card networks will be required to: Register as a domestic company in Bangladesh, Open local bank accounts, Report all local transaction data to Bangladesh Bank, Submit income statements for their Bangladesh operations, Pay corporate tax on revenue generated in the country, Central bank officials say this will not only boost tax earnings but also strengthen oversight over digital transactions - a critical area for AML/CFT risk monitoring. A turning point for Bangladesh’s digital financial ecosystem: Financial experts say the reform could mark a major shift in how global fintech operators engage with Bangladesh’s rapidly expanding payments market. “This is about creating a level playing field,” a senior banker told Daily Industry. “If local companies have to comply with tax and reporting obligations, foreign companies cannot remain exempt.” As Bangladesh accelerates its transition to a cash-lite economy, stakeholders believe transparency, accountability, and tax compliance from all operators - local or foreign - are essential for building a secure, modern payments infrastructure.
