Pakistan’s Digital Payment Ecosystem Shows Remarkable Growth
The State Bank of Pakistan (SBP) has released its Payment System Review for the first quarter of the fiscal year, highlighting significant strides towards a digital and cashless economy. The report, covering July to September 2024, showcases the rapid adoption of digital payment systems, infrastructure advancements, and the gradual decline in reliance on cash.
Retail payments in Pakistan witnessed an 8% growth in volume during the first quarter of FY25, reaching 1,951 million transactions worth Rs136 trillion. Payments made through digital channels surged by 9% in both volume and value, totaling 1,699 million transactions valued at Rs36 trillion. Digital payments now account for 87% of retail transactions, reflecting growing public trust in digital payment methods.
Mobile banking applications, including those offered by banks, microfinance banks, and branchless banking services, have been key drivers of this growth. During the quarter, 1,301 million transactions were conducted through these apps, amounting to Rs19 trillion. This marked an 11% increase in transaction volume and a 14% rise in value. The number of mobile banking app users also grew by 4%, reaching 96.5 million compared to 93.0 million in the previous quarter.
E-commerce continues to play a pivotal role in Pakistan’s digital payments landscape. Online payments for e-commerce grew by 29% during the quarter, with 118 million transactions recorded. Of these, 91% were made using digital wallets, signifying a shift from traditional card-based payment systems. The number of Point of Sale (PoS) terminals expanded to 132,224, processing 83 million transactions worth Rs429 billion. Meanwhile, the ATM network grew to 19,170 units, facilitating 243 million transactions totaling Rs3.9 trillion.
Efforts to enhance financial inclusion have also gained momentum. Branchless banking agents, particularly in rural areas, processed 28 million transactions for bill payments and mobile top-ups and 75 million transactions for cash deposits and withdrawals. The number of retailers accepting digital payments rose by 16%, supported by branchless banking initiatives promoting mobile wallets, QR codes, and other digital payment solutions.
The Raast payment system has shown remarkable performance, processing 197 million transactions worth Rs4.7 trillion. This system has proven effective for individuals and businesses, contributing to the evolving payments ecosystem in Pakistan. Collaboration among banks, FinTechs, payment service providers, and regulators has fostered innovation, financial accessibility, and inclusion across the nation.
The State Bank remains committed to driving a sustainable and inclusive financial future. By advancing digital innovation, it aims to empower individuals and businesses alike. The progress outlined in this review underscores Pakistan’s potential to transition to a fully digital economy, while building trust and confidence in financial services.
