The Government of Pakistan has launched an ambitious nationwide push toward a fully cashless economy, with the Prime Minister issuing a series of aggressive directives aimed at fast-tracking digital payment adoption, limiting cash use, and transforming the country’s retail and public transaction infrastructure.

According to the official minutes from the Steering Committee on Cashless Economy meeting held on July 3, 2025, the Prime Minister has ordered a 400% increase in digital payment targets, declared payment rails as public goods, and called for the mandatory adoption of digital payment systems by retail merchants in Islamabad Capital Territory (ICT), Azad Jammu & Kashmir (AJK), and Gilgit-Baltistan (GB) as pilot regions.

The directives, issued through the Prime Minister’s Office, outline sweeping structural, legal, and financial changes to support Pakistan’s cashless vision.

Key Directives from the PM’s Office

Here are the most critical developments:

1. Digital Payment Targets Quadrupled

The Sub-Committee on Digital Payments Innovation and Adoption has been directed to revise its targets upward by at least 400%, with an added instruction that all remittances must be routed through digital channels. The State Bank of Pakistan (SBP) has been tasked with immediate implementation.

2. Payment Rails Declared ‘Public Goods’

In a transformative move, digital payment rails (like QR-based systems and bank APIs) are now officially classified as public infrastructure. The SBP and commercial banks have been given one week to propose a model to reflect this decision.

3. Mandatory Digital Acceptance for Retail

Retail merchants in ICT, AJK, and GB must install and accept QR code, Point of Sale (POS), or soft POS systems by September 2025. This pilot program is intended for eventual nationwide rollout. Local district administrations will enforce compliance.

4. Small Merchant Onboarding Framework

SBP will roll out a simplified framework this month to help small merchants onboard digital payment platforms without red tape or high costs.

5. Cash on Delivery (CoD) Limits for E-Commerce

New limits on cash-on-delivery payments will be introduced and phased in to encourage digital e-commerce transactions. SBP, FBR, and the IT Ministry will jointly implement this policy.

Economic Incentives and Infrastructure Overhaul

1. Subsidies for POS Devices

The Ministry of Finance, SBP, and FBR are reviewing a plan for:

• Reduce import duties on payment devices (QR/POS)
• Offer zero-cost Raast QR usage to merchants.
• Provide a subsidy of 0.5% or Rs. 200 per transaction, whichever is lower, with an annual cost of Rs. 2.5 billion.

2. Public Wi-Fi and Digital Libraries

By December 30, 2025, the Ministry of IT & Telecom and PTA will launch free Wi-Fi zones and e-library spaces in Islamabad, covering parks, hospitals, universities, public offices, and metro stations.

3. Launch of City Islamabad App

The City Islamabad app, which includes e-Stamping functionality, will be launched by July 31, 2025, and will serve as the central interface for digital city services and payments under the Cashless Islamabad initiative.

Legal and Monitoring Reforms

1. Regulatory Barriers to Be Removed

The legal framework for Right of Way across provinces, ICT, AJK, and GB will be reviewed to eliminate bureaucratic hurdles that delay digital infrastructure deployment. Proposals are expected at the next committee meeting.

2. Digital Payments Index Launch

To track progress, Karandaaz Pakistan will launch a Digital Payments Index by August 2025, aligned with global standards and tied to measurable KPIs.

3. Public Awareness Campaign

A nationwide campaign will be rolled out in collaboration with Karandaaz in August 2025 to educate citizens on digital payment benefits, fraud prevention, and the shift toward a paperless economy.

4. Third-Party Audit of All Initiatives

To ensure transparency and global credibility, the Ministry of IT will hire an internationally reputed firm for third-party validation of every component of the cashless transition.

How will it impact Pakistan?

The latest directives mark Pakistan’s most comprehensive push yet toward a digital financial system, reflecting not just a policy ambition but a whole-of-government approach.

Experts believe this will not only boost tax documentation and compliance, but it will also reduce cash dependency and corruption. It will also enable faster remittance flows and encourage financial inclusion, especially for small merchants and women-led businesses.

However, challenges remain in the path toward a fully cashless economy. A significant portion of the population still prefers cash transactions, posing resistance to the adoption of digital payment methods. Additionally, there is a widespread lack of digital literacy, particularly in rural areas, where citizens may not have the knowledge or confidence to use electronic financial tools. Infrastructure gaps outside urban centers further hinder the seamless rollout of digital services, limiting access to reliable internet, payment terminals, and supporting technologies needed to sustain a nationwide cashless transition.

Therefore, creating public awareness must be treated as the top priority in Pakistan’s journey toward a cashless economy. Before introducing regulations or rolling out infrastructure, it is essential to build public understanding and trust in digital payment systems. Awareness campaigns are not just supportive measures; they are foundational drivers of demand. By educating citizens about the benefits of cashless transactions, addressing security concerns, and demonstrating ease of use, the government can unlock voluntary adoption at scale. When people understand the convenience, safety, and long-term economic impact of digital payments, they become active participants, not just passive recipients. In essence, awareness creates demand, and demand accelerates the success of every other reform.

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