It was eight years ago, when online ventures in Bangladesh were few and far between, that Dutch-Bangla Bank had the gumption to set-up a digital payment system.

“We did it because we had the foresight that e-commerce and online transactions will flourish in the country and for that our payment system will act as the enabler,” said Abul Kashem Md. Shirin, managing director and chief executive officer of Dutch-Bangla Bank.

At present, Dutch-Bangla has 1,500 merchants out of the total of 2,500 connected to its network.

But the number is below Dutch-Bangla's expectations.

“The market has full of potential but somehow e-commerce vendors are not succeeding in winning the customers' trust fully,” he said, adding that the status quo will change if global companies enter the fray.

At present, the country's e-commerce business is worth about Tk 2,000 crore a year and at best 25 percent of the amount is transacted using either a bank's digital payment gateway or mobile financial service, said Syed Mohammad Kamal, country manager of MasterCard.

For greater usage, the government needs to give some incentive.

“Without financial sector's digitisation, real digitisation will not be possible,” said Kamal.

According to Better Than Cash Alliance, Bangladesh's total transactions through the digital channels is less than one percent and only 2.5 percent of individual payments and 3 percent of business transactions are made digitally.

Razib Ahmed, a director of e-Commerce Association of Bangladesh (e-CAB), said they are still struggling to collect their payments.

“If the banks take a lead, digital commerce will definitely flourish.”

Ahmed said this year their target is to expand their market to Tk 3,000 crore.

Other than banks, some fintech startups are taking the initiative.

Take, for instance, iPay, a mobile application-based payment system that launched two weeks ago and functions like Paypal, which operates a worldwide online payments system, and Paytm in India.

“We are providing end-to-end cashless payment service,” said Zakaria Swapan, chief executive officer of iPay Systems Limited.

“We are also adopting different e-commerce platform and ensuring all kinds of transactions,” he added.

In alignment with the national slogan of 'Digital Bangladesh', United Commercial Bank launched the Upay, a mobile app-based payment solution, last year.

UCB customers can use Upay to make payments for goods and services from physical and online merchants. They can also do mobile recharge, bill payment, money transfer, ticketing, inward remittance, insurance premium and so on.

The mobile financial service platform is also coming in to good use in this quest for financial digitisation.

For instance, in February transactions through the platform hit Tk 1,016 crore.

The central bank is also taking different initiatives.

For instance, the Bangladesh Bank has permitted online fund transfer of up to Tk 5 lakh.

As of December last year, there were 1.64 crore debit cards, 9.08 lakh credit cards and another 1.38 lakh prepaid cards in circulation, according to data from the BB.

Bangladesh Bank's data also shows that online banking is growing in popularity by the day. At the end of February, the transaction value reached Tk 4.85 crore, up 11.9 percent from the previous month.

Shirin from Dutch-Bangla Bank said they are still very confident and hopeful that people will embrace the digital payment system and through this process the country's financial system will get a boost.

Muhammad Zahidul Islam is a Senior Repoter at Star Business, The Daily Star.