Bangladesh is moving one step closer to being a cashless society after the central bank gave the go-ahead to a company to facilitate payments between parties through online fund transfers.

Called the iPay, the fintech startup's system will function like Paypal, which operates a worldwide online payments system, and Paytm in India.

To avail the services of iPay, one will have to open a eWallet that would be linked with one's bank account. The eWallet can be loaded by transferring funds from the bank account.

Once loaded, the customer can transfer funds to another with an eWallet, make payments for purchases, pay utility bills, taxes, tuition fees and transport fares -- without touching any cash.

The system will be rolled out tomorrow.

The company has already inked agreements with the country's 57 commercial banks to integrate their accounts with eWallet, said Zakaria Swapan, chief executive officer of iPay.

Transactions through the digital payment system will be settled on a real-time basis, he said. “This will ultimately help build a cashless society.”

An individual would be allowed to transact a maximum of Tk 50,000 a day through the system. The monthly ceiling for withdrawal and deposits is Tk 2 lakh.

An eWallet can have a maximum balance of Tk 4 lakh. There is no cash-in and cash-out limit for business entities.

The central bank has termed the start-up as iPay Payment Service Providers as they are authorised to settle transactions on a limited basis.

Green and Red Technologies, another fintech company, have also applied to the central bank for the green light.

Raden Siddiqui, managing director of the company, told The Daily Star that his company is now waiting to get permission from the central bank to formally launch the digital payment system.

“It will require 5 to 10 years to popularise the system,” Siddiqui said, adding that the e-commerce transactions and fund transfer through the system will go up more if internet usage goes up.

He emphasised the importance of cyber security for the digital payment system to thrive.