The Payment and Settlement Systems Act 2024 is the main statute. It empowers Bangladesh Bank to license, regulate and supervise payment systems, payment system operators and payment service providers, and to issue regulations, circulars and licence conditions. Other rules also apply depending on the model, including regulations on mobile financial services, foreign exchange rules, anti-money laundering law, the Personal Data Protection Act 2026 and cyber security legislation. Because Bangladesh Bank issues detailed requirements through circulars that change over time, we confirm the current position at the start of every PSP licensing project and track updates through the process.

In general terms, a payment system operator runs infrastructure that connects banks and other institutions, such as switching networks, clearing arrangements or payment gateways used by multiple participants. A payment service provider offers payment services directly to customers or merchants, such as e-wallets, payment initiation or merchant acquiring. The distinction matters because the licence category, capital, governance and operational requirements differ. Some businesses perform both roles. We review the business model and its intended services to identify the correct category and avoid applying for a licence that does not fit the activities planned. Mixed models need careful analysis.

There is no fixed timetable that applicants can rely on. The process usually involves preparing the application, responding to Bangladesh Bank queries, possibly receiving an in-principle approval with conditions, then completing technical, capital and governance requirements before final permission to operate. Timing depends on the quality of the application, the complexity of the model, ownership structure, the regulator's workload and policy priorities. Well-prepared applications with clear answers on safeguarding, technology and compliance tend to progress more smoothly. We help clients plan for each stage and set realistic expectations with investors and partners. Delays often stem from incomplete answers.

Foreign investment in Bangladeshi fintech is possible, but ownership, control and licensing questions need careful planning. Bangladesh Bank considers the identity and standing of shareholders, the source of funds and the governance of applicants, and specific rules may affect foreign shareholdings in particular licence categories. Foreign exchange rules govern capital injection, fees and repatriation of profits, and investment must be registered with Invest Bangladesh. Some foreign groups partner with local banks or licensed providers instead. We advise on structures that work for both the regulator and the group, and on PSP licensing strategy for foreign-owned applicants.

Usually some form of authorisation is required if the business collects or settles funds on behalf of merchants, connects to banking or card infrastructure, or holds customer money. Depending on the model, a gateway may need its own licence under the 2024 Act or may operate through a licensed bank or payment provider under a partnership arrangement. Technical service providers that never touch funds may sit outside the perimeter, but the line is narrow. We review flows of funds and data, because small design choices can change the licensing outcome. Control of funds before settlement often decides the outcome.

Bangladesh Bank expects customer funds held by payment service providers to be kept separate from the provider's own money, typically in designated accounts with scheduled banks, and to be available to meet customer claims at all times. Rules also address reconciliation, use of funds, interest, record-keeping and what happens if the provider fails. Safeguarding is one of the most closely examined areas in PSP licensing and supervision. We help design safeguarding arrangements, draft trust or escrow account agreements with banks and prepare policies that satisfy both regulators and partner banks. Weak safeguarding often delays approval.

Lending is regulated separately from payments. Banks and licensed financial institutions can lend, and digital banks operate under their own framework, but a payment provider generally cannot extend credit unless permitted. Many fintechs therefore partner with banks or finance companies, providing the technology and customer interface while the licensed lender provides credit. Such arrangements need clear allocation of regulatory responsibility, customer disclosures, data sharing and collections practices. We advise on structures that keep fintechs on the right side of lending and payment rules while delivering a seamless product to customers. PSP licensing alone does not permit lending.

A licence brings continuing obligations. Licensed providers must comply with licence conditions, maintain capital and governance standards, file reports, safeguard funds, meet anti-money laundering and cyber security requirements, handle complaints and obtain approval before significant changes such as new products, changes of control or outsourcing of key functions. Bangladesh Bank may inspect and can impose penalties or restrictions for breaches. We provide ongoing regulatory support, compliance reviews, training and help with inspections, so that the value created through PSP licensing is not lost through later compliance failures. Yearly reviews catch drift from licence conditions. Records should be kept current.