Payment Initiation Service (PIS) is a smarter way to make payments directly from a bank account or mobile financial service wallet using a single application.

At present, customers with accounts in multiple banks or mobile wallets must open separate apps for Prime Bank, BRAC Bank, bKash, MeghnaPay, OK Wallet, Dmoney and others. This takes time and is often inconvenient. PIS addresses this fragmentation by allowing a single app to connect to all linked bank accounts and wallets. Customers can transfer funds, make merchant payments, or cash in and cash out from one platform.

The same logic applies to mobile banking agents. Through a PIS app, one agent can provide cash-in and cash-out services for customers of all mobile financial service operators, such as bKash, Nagad, MeghnaPay, Rocket or Upay from a single payment initiation service provider app. This removes the need to juggle multiple applications and balances, making daily operations faster and more efficient.

Technically, the PISP app acts as a secure bridge between customers and their respective banks or wallet providers. Customers log in to the app, select their linked account or wallet and initiate a payment. The app sends a payment request to the relevant bank or mobile financial service through the central bank's secure infrastructure. Once the customer authorises the transaction using a PIN, OTP or biometric verification, the payment is executed instantly. The result is a seamless experience in which users no longer need to switch between multiple apps, all under the supervision of the central bank.

The impact on agents nationwide could be significant. With one PISP app, agents can serve customers regardless of which wallet or bank they use. They no longer need to manage several apps or maintain separate balances for each operator. This simplifies money management, speeds up service delivery and strengthens the national digital payments ecosystem. It also improves access to services in both rural and urban areas, promoting broader financial inclusion.

PIS also fits naturally into Bangladesh's wider digital transformation agenda. The country is moving rapidly towards digital banking and open finance, with the Bangladesh Bank already rolling out initiatives such as interoperable digital transactions, Bangla QR and NPSB interoperability. PIS can bring these strands together into a connected network, enabling customers, merchants and agents to benefit from a more integrated digital payment experience. Bills can be paid from any bank account or wallet through a single app, while merchants can accept payments from any customer, regardless of where they bank.

A strong regulatory framework will be essential. PIS providers must be licensed and regulated by the Bangladesh Bank, with prior approval required for app launches, API connectivity and agent operations. The system should operate through the central bank's open API, NPSB or IIPS platforms to ensure real-time and secure connectivity between banks, payment service providers and mobile financial services. Compliance with payment system regulations, ICT security guidelines and KYC, AML and CFT standards will be mandatory, as will strong customer authentication for every transaction. All transactions should be settled through a central system, monitored by the central bank, with regular reporting, reconciliation, data privacy safeguards, dispute resolution mechanisms and fraud detection in place.

PIS has the potential to reshape how people access, transfer and manage money. By connecting banks, wallets, merchants and agents into a single interoperable network, PIS can enable faster, safer and more inclusive digital transactions. As the central bank moves to introduce licensed PIS providers under a structured framework, PIS could become a key enabler of open banking and help steer the country towards a less cash and more connected digital economy.

The writer is a digital finance practitioner. He can be reached at [email protected]