Pakistan Targets 100% Digital Government Payments, Plans to End Physical Cheques

The government has set a target of fully digitizing government-to-person payments and eventually eliminating physical checks as part of Pakistan’s broader transition towards a cashless economy, Minister of State for Finance Bilal Azhar Kayani said.

Speaking at the launch of a new digital financial-services initiative, Kayani said the Prime Minister-led committee on digital payments had established specific targets for expanding merchant acceptance, increasing digital banking usage and digitizing government payments.

According to the minister, the number of merchants accepting digital payments increased from around 500,000 in June 2025 to 2.03 million by June 2026, surpassing the government’s target of two million.

The number of digital banking users also climbed from 95 million to around 137 million over the same period, exceeding the target of 120 million.

Kayani said progress had also accelerated in government-to-person, or G2P, and person-to-government, or P2G, payments.

Digitization of G2P payments among centralized entities increased from 9% in June 2025 to 76%, while self-accounting entities improved from 5% to 75%, he said.

The government’s definition of a fully digital payment, according to Kayani, requires the entire transaction to be completed electronically without human intervention.

BISP Beneficiaries to Receive Digital Wallets

A major part of the government’s digitization program is focused on the Benazir Income Support Programme, which provides cash assistance to more than 10 million beneficiaries.

Kayani said BISP payments were being moved towards a fully digital model under which every beneficiary would receive a digital wallet functioning in a manner similar to a bank account.

The wallets are expected to allow beneficiaries to receive funds, transfer money, pay utility bills and withdraw cash.

The move is designed to replace the previous system under which beneficiaries received payment codes and visited agents to collect funds, a process that could expose recipients to additional charges and deductions.

Government Identifies Priority Institutions

Kayani said several high-impact public-sector organizations had been identified for priority digitization.

These include the Capital Development Authority, passport offices, National Highway Authority, transport authorities, gas utilities and power companies.

The government also plans to work with provincial administrations and the private sector to improve the digital payment experience, with particular emphasis on QR-based transactions.

The long-term objective, Kayani said, is to ensure that all government-to-person payments are made electronically and physical cheques are no longer issued.

That would include payments to government employees, pensioners, vendors, and other recipients. The shift represents a significant expansion of Pakistan’s digital-payments agenda, moving the focus beyond consumer banking towards the digitization of large-scale public-sector transactions.

If implemented successfully, the policy could reduce dependence on cash and cheques while bringing a larger share of government payments into formal digital channels.

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