State Bank Report: Pakistan’s Digital Transactions Grow 57% Annually

On Wednesday, the State Bank of Pakistan (SBP) announced that digital transactions continued their development trajectory in the fiscal year 2022-2023. The SBP noted that the aggregate volume and value of mobile and internet banking transactions saw annual growth of 57% and 81% respectively.

This information was disclosed in the Annual Payment Systems Review for the fiscal year 2022-23, which was made available by the central bank. This assessment provides information regarding the expansion and trends of banking transactions in the country, as well as the utilization of the infrastructure and instruments of payment systems.

According to the annual assessment, digital transactions kept on their upward development trajectory. This was due to a rising desire among customers to use digital channels, such as mobile and internet banking, to satisfy their financial requirements.

According to the Annual Review, there was a significant increase in E-Banking transactions through Banks and Microfinance Banks (MFBs), with a growth rate of 29%. Additionally, the value of these transactions also experienced a notable increase of 21% during the year. The Review further noted that Branchless Banking transactions exhibited a similar growth pattern, with the number of transactions increasing by 28% and the value by 45% during FY23.

According to the SBP, there was a substantial increase in the number of e-banking customers. Specifically, the year witnessed a rise of 15% in internet banking users, 30% in mobile banking users, and 42% in BB mobile app users. By creating more than 2 million e-wallets since their founding, Electronic Money Institutions (EMIs) have also made a significant contribution to the inclusion of consumers of digital banking.

The review indicated the efficiency and immediacy of e-banking’s payment solutions have resulted in an increased customer base. Over the years, the volume of transactions conducted through e-banking has consistently grown. In contrast, there has been a decline of over 4% in paper-based transactions during FY23, with a cumulative decrease of approximately 20% over the past five years. However, it was further noted that the value of paper-based transactions experienced a 20% growth in FY23.

The Real-Time Gross Settlement (RTGS) system in Pakistan, along with Raast- Pakistan’s Instant Payment System, which is owned and maintained by the State Bank of Pakistan (SBP), serves as a means for financial institutions and banking consumers to effectively process and settle transactions. Processing and settling transactions are made easier for financial institutions and banking consumers in Pakistan thanks to the Real-Time Gross Settlement (RTGS) system of Pakistan and Raast, Pakistan’s Instant Payment System, which is owned and maintained by the State Bank of Pakistan (SBP).

During the course of the year, RTGS handled 4.9 million transactions worth 640.4 trillion rupees, whereas Raast handled 155 million transactions worth 3.2 trillion Pakistani Rupees. Both of these figures are representative of the current fiscal year.

According to the State Bank of Pakistan (SBP), financial institutions are enhancing their electronic banking infrastructure by increasing the number of Point-of-Sale (POS) terminals, Automated Teller Machines (ATMs), Cash/Cheque Deposit Machines (CDMs), e-commerce merchants, and agents’ networks. This expansion aims to cater to the demands of clients.

As of June 30, 2023, the total number of point-of-sale (POS) terminals stood at 115,288, while there were 17,808 automated teller machines (ATMs), 520 cash deposit machines (CDMs), and 6,889 e-commerce shops facilitating payment services for clients. Throughout the fiscal year, there was an annual increase of 45% in the number of transactions conducted through Point-of-Sale (POS) systems, reaching a total of 199.3 million transactions. Additionally, the number of transactions carried out by Automated Teller Machines (ATMs) experienced a yearly growth of 17%, totaling 809.7 million transactions.

According to the report, the number of domestic e-commerce transactions conducted through payment cards reached 31.8 million, with a total value of Rs. 142 billion. As of June 30, 2023, there were 58.1 million payment cards in circulation. Among these, 44.5 million were issued by banks and MFBs, 10.8 million were issued by branchless banks, and 2.8 million were issued by EMIs.

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