87% retail payments carried out via digital channels: SBP
Retail transactions 1.951 billion, totalling Rs136 trillion from July to September
- Share of digital payments in Q4 of FY24 increased to 27%.
- Retail transactions witness 8% surge in volume in Q1 of FY25.
- 251 million (13%) transactions processed via OTC channels.
KARACHI: Amid the government’s strenuous efforts to digitise the economy, the State Bank of Pakistan (SBP) has revealed significant advancements in payment ecosystems and infrastructure with 87% of all retail transactions being processed via digital channels, The News reported Saturday.
In its quarterly payment systems review for the first quarter of the fiscal year 2025, the central bank on Friday said that digital channels reported a total of 1.699 billion retail transactions, while over-the-counter (OTC) channels comprised the remaining 13% amounting to 251 million transactions.
The report further noted an 8% increase in the volume of retail transactions reaching 1.951 billion and totalling Rs136 trillion during the period of July to September.
In terms of value, the share of digital payments rose from 24% in the fourth quarter of FY24 to 27% amounting to Rs36 trillion, whereas OTC payments — through bank branches and branchless banking agents — accounted for 73% totalling Rs100 trillion.
The report outlines that the key objective of any country’s payment system is to provide safe, efficient, and reliable payment options for transferring funds, purchasing goods and services, settling payments, and facilitating the movement of cash.
The payment system in Pakistan plays a crucial role in ensuring customers have access to efficient and secure payment options.
The country’s payments infrastructure includes PRISM — real-time gross settlement (RTGS) system, the Raast instant payment solution, 33 banks, 12 microfinance banks (MFBs), five payment system operators, service providers (PSOs/PSPs), four electronic money institutions (EMIs), and 12 branchless banking players (BBs), along with fintech and third-party service providers.
Together, these entities offer seamless and secure fund transfer and settlement options for Pakistanis.
Payments in Pakistan can be divided into two main categories: large-value payments, processed through the RTGS system, and retail payments, which involve typically low-value transactions that occur during regular business or daily life activities.
Since its inception in 2022 and up to the end of the first quarter of FY25, Raast has processed 848 million transactions, totalling over Rs 19 trillion, and continues to grow at a consistent pace, according to the report.
In Q1 FY25, both the volume and value of transactions increased by 17% compared to Q4 FY24, with the volume reaching 197 million transactions and the value amounting to Rs4.7 trillion. The daily average of transactions reached 3 million. By the end of the quarter, there were 39.5 million registered Raast IDs. Raast enhances the efficiency of instant payments for both individuals and businesses.
Mobile banking apps provided by banks, MFBs, BBs and EMIs played a pivotal role in this growth, with 1,301 million transactions amounting to Rs19 trillion being carried out through these apps during the quarter, reflecting an 11% rise in volume and 14% in value. The collective number of mobile banking app users grew by 4%, reaching 96.5 million from 93 million in the previous quarter.
The report noted that e-commerce is also emerging as an integral component of Pakistan’s digital payments, with a 29% increase in online e-commerce payments.
Of the 118 million online e-commerce payments during the quarter, 91% were conducted through digital wallets, signifying a shift from traditional card-based systems.
Complementing this growth, the number of point-of-sale (POS) terminals expanded to 132,224, enabling 83 million transactions worth Rs429 billion.
The ATM network grew to 19,170 units, facilitating 243 million transactions worth Rs3.9 trillion, maintaining its key role as a cash withdrawal channel.
Efforts to include underserved segments have gained further momentum, with branchless banking agents playing a critical role in extending financial services, especially in rural and remote areas.
Over 693,178 agents processed 28 million billion payments, mobile top-ups and 75 million cash deposit and withdrawal transactions during the quarter.
Retail merchants accepting digital payments witnessed a 16% growth, driven by branchless banking initiatives that enable payments through mobile wallets, QR codes and other digital tools.
These developments underscore the importance of alternative financial channels in bridging economic disparities across regions.
