KARACHI: Digital payments accounted for 88 percent of retail transactions in Pakistan in the outgoing fiscal year, the Pakistani central bank said on Monday, amid Islamabad’s push for digitization to transform its $400 billion economy.
The State Bank of Pakistan (SBP) said this in its Annual Report on Payment Systems, which presented a comprehensive analysis of current payment ecosystem, key evolving trends shaping the payment landscapes, and notable developments in fiscal year 2024-25 that ended in June.
The report illustrated swift expansion of Pakistan’s payments landscape over the past fiscal year, catalyzed by regulatory initiatives, the expansion of digital infrastructure, and strong consumer adoption of mobile and Internet-based platforms.
“Retail payments registered robust growth, reaching 9.1 billion transactions worth PKR612 trillion ($2.164 trillion), and witnessing an increase of 38 percent in terms of volume and 12 percent in value on a YoY [year-on-year] basis,” the SBP said, adding that digital channels continued to demonstrate steady momentum as Pakistanis increasingly embraced mobile apps, Internet banking and e-money wallets.
“Payments through digital channels accounted for 88 percent of all retail transactions, growing from 78 percent in FY23 and 85 percent in FY24. Mobile banking apps led with over 6.2 billion transactions, witnessing growth of 52 percent, while Internet banking portals processed 297 million transactions, up 33 percent from the previous year.”
Pakistan has traditionally been a cash-dominated market where a significant portion of transactions, particularly in the informal sector, were conducted in cash. Officials say many of these transactions were aimed at avoiding taxes.
In recent years, the SBP has taken steps to ensure a transition toward a more cashless economy so that transactions become easier, transparent and traceable. The South Asian country is also developing digital identities of all its citizens to enable secure and efficient payments, Pakistani state media reported in August.
In the last fiscal year, the central bank said, e-money wallet apps exhibited the fastest growth trajectory, with both transaction volume and value doubling during the year, despite their limited share in the overall number of mobile banking apps.
“This reflects growing consumer trust in electronic money institutions as a potential key driver of inclusion and adoption. This transformation was supported by significant strengthening of the underlying infrastructure, which provided a solid foundation for sustained growth and operational efficiency,” the report read.
“Raast, Pakistan’s instant payment platform, recorded more than a two-fold increase in both transaction count and value, establishing itself as a cornerstone of the digital ecosystem.”
The industry’s offering on Raast Person-to-Merchant (P2M) services marked beginning of a transformative journey toward advancing digital inclusivity, reducing reliance on costly infrastructure, enabling faster settlements, and fostering a transparent digital trail that enhances access to formal financial services, according to the report.
“The point-of-sale network expanded to 195,849 terminals across 159,284 merchant locations, enabling nearly one million daily card payments, compared to 0.7 million in the last fiscal year,” the report read.
“At the same time, e-commerce payments continue to show inclination toward account and wallet-based channels, which represents 93 percent of online transactions. The ATM network also grew by more than 7 percent to 20,341 machines, with each handling an average of 140 transactions on a daily basis.”
