Pakistan’s Cashless Economy Turns One: Transactions Hit 11.3 Billion, Merchants Quadruple to 2 Million

A year ago, Pakistan launched one of its most ambitious economic reform programmes. The Cashless Pakistan initiative was built on three stated pillars: public convenience, economic transparency, and the formal documentation of a cash-dominated economy through digital payments. One year later, the first formal review has taken place, and the headline numbers are significant enough to demand both celebration and scrutiny.

Minister of State for Railways and Finance Bilal Azhar Kayani chaired a high-level review meeting at the Finance Division on July 6, 2026, to assess one year of progress under the Cashless Pakistan initiative. The room reflected the initiative’s cross-institutional scope; senior representatives from the State Bank of Pakistan, FBR, NADRA, Controller General of Accounts, Ministry of IT, Raast Payments Pakistan, major commercial banks, digital banks, telecom operators, and development finance organisations all attended.

The numbers presented at the meeting paint a picture of genuine momentum. Annual digital transactions rose from 6.9 billion to 11.3 billion, a 64 percent increase in one year. Active digital payment merchants grew from 500,000 to over 2 million, a fourfold expansion supported primarily by the government’s Raast QR Code initiative. Digital banking users now exceed 135 million. Financial inclusion has risen to 69 percent, with a narrowing gender gap attributed to targeted interventions.

The Structure Behind the Numbers

The Cashless Pakistan initiative operates through three sub-committees under a main committee, each led by a senior government official with specific sector responsibility. Digital Payments, Innovation and Adoption is led by the Governor of the State Bank of Pakistan. Digital public infrastructure is led by the Minister of IT and Telecommunications. Digitizing Government Payments is led by the Finance Secretary.

This three-pillar structure is worth understanding because it explains how the initiative has been able to generate movement across multiple fronts simultaneously. The SBP-led sub-committee drives merchant and consumer adoption through payment infrastructure including Raast. The IT ministry sub-committee develops the underlying digital infrastructure. The Finance Secretary sub-committee targets the government’s own payment processes, a critical component given how large a share of Pakistan’s total transaction volume flows through government-to-people and government-to-business channels.

On the G2P side, approximately 75 percent of payments at both centralised and self-accounting entities are now being processed digitally, a figure that represents a meaningful shift in how the government itself moves money.

Raast QR: The Merchant Adoption Engine

The quadrupling of active digital payment merchants, from 500,000 to over 2 million, is the initiative’s most visible retail-level achievement, and it is largely attributable to the Raast QR Code rollout.

QR-based payment acceptance removes the primary barrier that has historically prevented small and micro merchants from adopting digital payments: hardware cost. A merchant does not need a POS terminal, a card reader, or any dedicated equipment to accept Raast QR payments. A printed QR code or a smartphone screen is sufficient. For Pakistan’s millions of small traders, shopkeepers, and market vendors, whose margins are too thin to absorb traditional payment infrastructure costs, this frictionless entry point has been the unlock.

The Raast QR initiative has been supported by active merchant onboarding campaigns from commercial banks and digital wallets, incentivised by the government’s policy framework. The result is a merchant digital payment footprint that has expanded faster in one year than it did in the preceding decade of digital payment infrastructure development.

135 Million Digital Banking Users: What the Number Means

Pakistan’s digital banking user base reaching 135 million is a striking figure for a country that was adding digital accounts at far more modest rates just three years ago. It reflects the combined effect of mobile wallet expansion, the digitalisation of government transfer programmes, and the increasing availability of mobile banking services that do not require a visit to a bank branch.

The caveat, as with all financial inclusion statistics, lies in what active means. Account ownership and active usage are different things. Pakistan has previously recorded high account registration numbers that masked low actual transaction frequency. The government’s emphasis on active merchants rather than registered merchants signals awareness of this distinction. Whether the 135 million digital banking users figure tracks active usage or account ownership will be important context when the third-party assessment publishes its findings.

Financial inclusion reaching 69 percent represents meaningful progress for a country that has historically had one of South Asia’s largest financially excluded populations. The narrowing gender gap, attributed to targeted interventions, addresses one of Pakistan’s most persistent structural inequalities in financial access, where women’s account ownership has lagged men’s by a significant margin.

The interventions driving female financial inclusion include conditional cash transfer programmes disbursed through digital accounts, targeted mobile wallet onboarding for women in lower-income segments, and the expansion of agency banking networks in areas with limited formal branch access. These are structural changes rather than statistical adjustments; they represent real shifts in who has access to formal financial services.

The Third-Party Audit: The Most Important Detail in the Room

Buried in the review meeting’s reported outcomes is the most significant disclosure of the entire session: the government has hired an external third party, EY, represented at the meeting by Abbas Ali and Adeel Shirazi along with their team, to validate the initiative’s progress, streamline reporting gaps, and eliminate data duplication.

Minister Kayani emphasised the need for absolute transparency and prudent use of public funds, directing that the data be independently verified before being presented as policy success.

This is a notable acknowledgment. Government initiatives in Pakistan do not typically commission independent audits of their own progress figures mid-cycle unless there is concern that internal reporting may not tell the complete story. The directive to eliminate data duplication in particular suggests that some of the headline numbers may include double-counting, the same transaction or merchant recorded by multiple reporting institutions, that an independent assessment needs to clean up before the figures can be cited with confidence.

This does not mean the progress is fabricated. It means the government is taking the responsible step of verifying it before making further policy decisions on the basis of it. EY’s assessment will be the definitive measure of whether Pakistan’s digital payment transformation is as advanced as the first-year review numbers suggest.

25 Government Entities to Be Fully Digitised by December 2026

The review also highlighted a specific near-term target: 25 high-impact federal and provincial entities identified for complete digitisation through Raast by December 2026. This target is significant because government payment volumes, salaries, pensions, subsidies, tax refunds, procurement payments, represent some of the largest individual transaction flows in Pakistan’s economy. Routing these through Raast creates a documented, auditable record of public finance flows that cash and cheque-based systems cannot provide.

The December 2026 deadline is ambitious. Full digitisation of a government entity involves not just payment infrastructure but also system integration, staff training, change management, and regulatory compliance work that typically takes longer than external timelines anticipate. Whether 25 entities achieve complete digitisation by year-end will be a concrete test of the initiative’s execution capability.

What Still Needs to Happen

The Cashless Pakistan initiative’s first-year numbers are the easy half of a much longer journey. Pakistan’s retail merchant universe is estimated at 4 to 5 million outlets, meaning 2 to 3 million have still not made the digital payment transition. The remaining merchants are likely harder to convert: older operators, lower-traffic categories, areas with weaker digital infrastructure, and transaction networks where cash remains the only practical option for customers.

Sustaining the momentum requires the promised downstream benefits of digital adoption, credit access, tax compliance incentives, financial identity, to materialise for the merchants who have already made the switch. If early adopters see no tangible benefit beyond the transaction itself, the incentive for the remaining half of the market to follow weakens considerably.

The initiative’s governance structure, three subcommittees, multiple regulators, private sector partners, and now an independent auditor are comprehensive enough to generate real change if coordinated effectively. The risk is the coordination cost: the more institutions involved, the more alignment is required to move quickly.

The Bottom Line

Pakistan’s Cashless Economy Initiative has delivered a genuine first-year performance; 11.3 billion transactions, 2 million active merchants, 135 million digital banking users, and rising financial inclusion are not numbers that happen by accident. They reflect real infrastructure investment, real policy pressure, and real behavioural change across millions of merchants and consumers. But the government’s own decision to commission an independent audit signals appropriate humility about what those numbers actually prove at this stage. EY’s assessment will either validate the milestone or refine it. Either outcome is useful, because a documented economy built on verified data is worth more than one built on impressive-sounding figures that have not been independently tested.