1LINK Wants PayPak Cards Mandatory for All Government Employees, Taking On Visa and Mastercard

1LINK has proposed making PayPak cards mandatory for government salary accounts, subsidy programmes, and public sector payments, a direct challenge to Visa and Mastercard’s dominance in Pakistan’s payment landscape that would affect millions of public sector employees and benefit recipients overnight if implemented.

Every time a Pakistani government employee uses their salary account debit card or a social safety net beneficiary collects a payment, a foreign card scheme, typically Visa or Mastercard, sits in the middle of that transaction. The interchange fees, the routing costs, and the data those transactions generate flow through international infrastructure rather than Pakistan’s own payment rails.

1LINK wants to change that. And it has gone to the Senate to make the case.

What 1LINK Is Proposing

The proposals, shared with the Senate Standing Committee on Finance, centre on a fundamental shift: making PayPak, Pakistan’s domestically developed card payment scheme, the default for government-linked payments rather than an optional alternative to international networks.

The specific proposals cover several interconnected areas.

Mandatory issuance of PayPak cards for all government employees’ salary accounts would be the most sweeping single measure, affecting every public sector worker whose salary currently flows through a Visa or Mastercard-branded debit card. Extending the mandate to beneficiaries of government subsidies, social safety-net programmes such as BISP, and mass-transit payment systems would extend PayPak’s reach into some of the largest payment flows the government manages.

To ensure the cards can actually be used once issued, 1LINK has recommended that all public-facing government service centres — including NADRA offices, Excise departments, and Passport Offices, install PoS machines capable of accepting PayPak. A card that cannot be used where government services are accessed is a card that will sit unused regardless of mandate.

On the demand side, 1LINK has proposed tax relief and incentives on PoS and e-commerce transactions conducted through PayPak, along with discounts, cashback offers, and loyalty rewards for PayPak payments on utility bills, fuel purchases, public transport, and other government-facing transactions.

Why This Matters Beyond the Proposals Themselves

Pakistan pays significant foreign exchange in fees to international card schemes for transactions that are entirely domestic; a Pakistani government employee’s salary being credited and then spent in Pakistan has no logical reason to require international card infrastructure. The fee outflows associated with routing domestic transactions through Visa and Mastercard networks represent a recurring drain on foreign exchange that a functional domestic alternative would eliminate.

The national security dimension is equally relevant. Payment infrastructure that routes through foreign networks creates dependency on systems outside Pakistan’s control and oversight. A domestic scheme operating on national payment rails, processed, settled, and regulated entirely within Pakistan, is more resilient, more sovereign, and less exposed to the kind of geopolitical disruption that makes dependence on any single foreign infrastructure provider a strategic vulnerability.

These arguments are not new, and PayPak is not new; it has existed for years. The problem has been adoption. A domestic scheme with limited merchant acceptance and no compelling reason for cardholders to choose it over the globally accepted Visa or Mastercard alternative cannot gain the critical mass it needs to be useful. 1LINK’s mandatory proposal is, at its core, an acknowledgment that voluntary adoption alone has not worked and that government mandate is the fastest path to scale.

The SBP’s Role and the Raast Context

The State Bank of Pakistan has been building the domestic payment infrastructure that underpins both PayPak and Raast, Pakistan’s instant payment system, as complementary pillars of a national payment strategy designed to reduce international dependency and expand financial inclusion.

The SBP has introduced co-badged PayPak cards that can be used for both domestic and international transactions, addressing the practical concern that a purely domestic card leaves holders without options when travelling or transacting internationally. It has expanded PayPak acceptance for e-commerce and run promotional campaigns to increase merchant awareness.

On the Raast side, the SBP informed the Senate committee that daily Person-to-Merchant transactions had surged from approximately 60,000 in June 2025 to approximately 1.1 million by June 2026, a near-twentyfold increase in a single year, supported by a Rs 3.5 billion government allocation for a Raast QR-code subsidy programme in FY2025-26.

That trajectory demonstrates that digital payment adoption in Pakistan responds rapidly to the right combination of infrastructure investment and financial incentive. The Rs 3.5 billion QR subsidy delivered nearly a million additional daily P2M transactions in twelve months. If a similar policy intensity were applied to PayPak, through mandatory issuance backed by cashback incentives and PoS mandates, the adoption curve could follow a similar trajectory.

The Challenges of Mandatory Rollout

1LINK’s proposal is directionally sound but administratively ambitious. Mandatory card issuance across all government salary accounts requires coordination between the Finance Division, individual ministries, and the banks that manage government salary disbursement. Retrofitting PoS infrastructure across NADRA, Excise, and Passport Offices requires procurement, installation, and staff training. Tax incentives for PayPak transactions require fiscal policy changes that go beyond 1LINK’s remit.

The merchant acceptance dimension is also critical. A mandatory PayPak card for government employees is only as useful as the number of merchants that accept it. Outside of government service centres, PayPak’s acceptance network remains significantly smaller than the Visa and Mastercard networks that have built their footprint over decades. Mandatory issuance without parallel merchant acquisition would create millions of PayPak cardholders who continue to use their Visa and Mastercard cards for private transactions because PayPak simply does not work everywhere they shop.

The Global Precedent

Pakistan is not the first country to pursue domestic card scheme development through government mandate. India’s RuPay card, developed by the National Payments Corporation of India, achieved scale precisely through mandatory issuance for Jan Dhan accounts and government-linked payments before expanding into a genuinely competitive alternative to Visa and Mastercard across the Indian economy. RuPay now processes billions of transactions annually and is accepted internationally through partnerships with major global networks.

The RuPay model is the template 1LINK appears to be drawing from. Government mandate creates the initial scale. Scale creates merchant acceptance. Merchant acceptance creates genuine utility. Genuine utility drives voluntary adoption beyond the mandated base.

Whether Pakistan can execute the same trajectory depends on implementation discipline, sustained policy commitment, and the SBP’s ability to maintain momentum on both PayPak and Raast simultaneously while managing the existing financial sector’s complex relationships with international card networks.

The Bottom Line

1LINK’s PayPak mandate proposal is the most direct challenge to Visa and Mastercard’s dominance in Pakistan that any institution has formally put before parliament. The economic case for routing domestic government payments through a domestic payment scheme is clear. The implementation path is difficult but not unprecedented. The Senate committee’s response to the proposal, and the Finance Division’s willingness to act on it, will determine whether PayPak becomes Pakistan’s RuPay or remains a well-intentioned domestic alternative that never achieved the scale to matter.