Pakistan’s Digital Payment Transformation: A Leap Towards a Cashless Economy

In a significant milestone towards digitizing the economy, the State Bank of Pakistan (SBP) has revealed notable advancements in the country’s payment ecosystem. According to its quarterly payment systems review for the first quarter of fiscal year 2025, 87% of all retail transactions were processed through digital channels, highlighting Pakistan’s accelerating shift towards a cashless economy.

Pakistan’s Digital Payment Transformation: A Leap Towards a Cashless Economy

Growth in Digital Transactions

Between July and September 2024, the total volume of retail transactions reached 1.951 billion, reflecting an 8% increase compared to the previous quarter. These transactions amounted to an impressive Rs136 trillion, with digital payments accounting for 27% of the total value, up from 24% in the preceding quarter. In contrast, over-the-counter (OTC) payments—handled through bank branches and branchless banking agents—made up 13% of the transactions by volume, equivalent to 251 million transactions.

The SBP report attributes this shift to the growing adoption of digital payment solutions, supported by an expanding infrastructure that includes mobile banking apps, digital wallets, and instant payment systems like Raast.

The Role of Raast in Revolutionizing Payments

Introduced in 2022, Raast, Pakistan’s instant payment solution, has become a cornerstone of the country’s digital transformation. By the end of the first quarter of FY25, Raast had processed 848 million transactions worth over Rs19 trillion. During this period, the system witnessed a 17% increase in both transaction volume and value compared to the previous quarter, with daily transactions averaging 3 million. The number of registered Raast IDs grew to 39.5 million, reflecting its growing popularity among individuals and businesses alike.

Raast’s ability to facilitate instant payments has significantly enhanced efficiency and accessibility, enabling users to transfer funds seamlessly and securely. This system has not only empowered businesses but also bridged gaps for individuals in underserved areas.

The Impact of Mobile Banking and E-Commerce

Mobile banking has emerged as a pivotal driver of digital payment growth. During the quarter, mobile banking apps processed 1,301 million transactions worth Rs19 trillion, marking an 11% rise in volume and a 14% increase in value compared to the previous quarter. The number of active mobile banking users also grew to 96.5 million, underlining the widespread adoption of these platforms.

See Also: aast Payment System Processes 892 Million Transactions Worth Rs. 20 Trillion

E-commerce has also gained momentum, with a 29% surge in online payments. Of the 118 million e-commerce transactions recorded, 91% were conducted through digital wallets, showcasing a shift from traditional card-based systems to more user-friendly digital alternatives.

Expanding Financial Inclusion

Branchless banking agents have played a crucial role in extending financial services to remote and rural areas. Over 693,178 agents processed 28 million bill payments, mobile top-ups, and 75 million cash deposit and withdrawal transactions during the quarter. Retail merchants accepting digital payments also grew by 16%, driven by innovations like QR codes and mobile wallets.

The Road Ahead

These advancements highlight Pakistan’s progress in creating a more inclusive and efficient financial system. With ongoing efforts to enhance digital infrastructure, the country is steadily moving towards a cashless economy, bridging regional disparities and fostering economic growth. As digital adoption continues to rise, the future of Pakistan’s payment ecosystem looks promising, offering convenience, security, and accessibility for all.