Making transactions through bangla quick response (QR) code not only chargeless but also incentive-induced is certainly a momentous decision. Earlier the bangladesh bank set a minimum merchant discount rate (mdr) of 1.0 per cent for payments to be made through the national payment switch (npbs) bangladesh. Understandably, this acted as a disincentive for micro-merchants. No wonder, they were reluctant to switch to the cashless payment system. Small retailers with a daily transaction, say, between tk 500 and tk1,000 would have lost tk50 to tk100 as charge and at the end of a month, the loss would be tk 1,500 and tk 3,000. For such micro-merchants with a thin margin of profit on their small trade, these amounts would be quite significant. Now, the decision in favour of not only waiver of the fees but also provision for two-sided incentives on each transaction is likely to change the npbs ecosystem. Small and marginal retailers with daily transactions up to tk 2,000 will receive an incentive at the rate of 0.10 and the issuing party at 0.20 per cent.

The advantages of a single interoperable qr code are many. It allows customers to pay through banks and mobile financial service (mfs) providers. Besides simplifying transactions, it can reduce dependence on cash and more importantly bring more businesses into the financial ecosystem. From the authorities' point of view such transparency of trade is most welcome. But digital infrastructure is not without costs. Cybersecurity, settlement systems and customer support involve expenditures on them. On top of all these, the incentives now declared will require finance. The bangladesh bank has recently decided to create a fund of tk1.0 billion in order to subsidise the mdr. So the policymakers have done their part of the job with the objective of facilitating faster adoption of the Bangla QR code.

Now the question is, if such measures will be enough to bring the micro-merchants into the digital fold. The challenges are not negligible. Many of the small and marginal traders cannot afford a smartphone and even if they can somehow, a minimum level of digital literacy will be required to have a clear idea of the modes of payment. They must know how to verify a payment, check daily sales, spot a fake screenshot and resolve a failed transaction. Without learning the basic skill to handle such operations, they will not be able to navigate the digital payment environment. A campaign at the grassroots level will have to be launched for such skill development. If the quick response system does not match the instantaneousness of cash payment and takes time for settlement, micro-merchant will face problems and even count losses. 

However, the merit of the npbs is immense because of the transparent records of transactions. This paves the way for small and marginal traders' access to finance. The transaction records can be enough for traders to qualify for loans without collateral. Their fear of exposure of their business transactions to the tax authority, requiring them to pay taxes is unfounded. Only those dealing in smuggled goods and having transactions to hide will feel unease in adopting the Bangla QR code. Honest and genuine small traders, provided they learn the skill to handle digital transactions, stand to benefit from transition to this cashless payment system.