Digital transactions took centre stage in Pakistan's financial landscape during Q3 FY 2023-24, capturing a commanding 83% of 844 million total retail payments processed by Banks and Electronic Money Institutions (EMIs), while the remaining 17% were Over-the-Counter (OTC) transactions at banks’ branches.
According to the Payment System Review for the third quarter issued by the State Bank of Pakistan (SBP), the growth in digital transactions is largely attributable to fund transfers, bill payments, payments for goods and services, and mobile top-ups.
Moreover, customers are more reliant on Automated Teller Machines (ATMs) compared to bank branches for cash withdrawals for their daily needs.
It is also notable that the network of 18,655 ATMs across the country maintained an average uptime of 96.5% during the quarter. Digital wallets and instant payments remain key drivers of digital transactions.
Mobile banking transactions continue to be the most preferred option with a share of 43% in digital transactions during the quarter, reaching 301 million amounting to Rs12,955 billion.
Internet banking transactions grew by 3%, reaching 59m amounting to Rs6,467bn. In-store purchases through Point-of-Sale (POS) machines also witnessed growth, with volume increasing by 8% to 71m and value by 6% to Rs394bn.
The e-commerce (only card-not-present) transactions however posted a decline of 13% in volume reaching 10m but increased by 3% in value reaching Rs52bn.
The majority of the POS merchants are retail outlet stores, clothing and apparel outlets, restaurants and fuel stations whereas clothing and apparel online stores are the most common type of e-commerce merchants.
In Pakistan, digital payment infrastructure is aimed at supporting users with seamless and value-added services through various payment instruments and digital channels including digital wallets, mobile banking apps, payment cards, online banking portals, and e-commerce gateways.
At the close of the quarter, there were around 59m Branchless Banking mobile app users, 57m payment cards, 17m mobile banking app users (of commercial banks), 11m internet banking users,
and 3m EMIs’ e-wallet users.
On average, the digital user base grew by around 8% during the quarter, indicating a positive trend in the adoption of digital payments. As of quarter end, banks were facilitating payments through their extensive network of 18,193 branches, 18,655 ATMs, 120,641 POS terminals, and integrated payment gateways for e-commerce, ensuring widespread access points for customers.
While all access points/channels are growing consistently, the number of POS terminals declined slightly by 0.9% during the quarter due to the retrieval of inactive POS machines by two acquiring banks.
Branchless Banking (BB) Players, through their vast network of 651,672 agents, are also extending payment services across all geographic and economic segments in the country.
Data on BB transactions is published separately under the Quarterly SBP Branchless Banking Newsletter.
Raast, Pakistan's instant payment system, plays a crucial role in facilitating free, convenient and secure real-time transactions across the country. During Q3 of FY24, Raast processed 140m transactions totaling Rs3,437bn.
This marked a notable increase from 107 million transactions amounting to Rs2,321bn in the previous quarter. Significant growth in both the volume (31%) and value (48%) of transactions through Raast highlights its growing importance in the national payment landscape.
The growth momentum will further increase as the newly launched Person-toMerchant (P2M) payment services have started enabling physical and online merchants to accept payments through various modes, including Unified Quick Response (QR) Codes, Raast aliases (such as mobile phones), bank accounts (IBAN), and Request to Pay (RTP).
To sum up, trend of the increasing digital transactions across various channels continues to be driven by robust payment infrastructures and customers’ growing preference for mobile and internet-based channels.
Raast is the major driver of growth in digital payments, thus increasing accessibility, efficiency, and security of transactions in the country.
During the quarter, the SBP granted in-principle approval under the Regulations for EMIs to Cerisma Pvt. Limited for offering e-money wallets for consumers and merchants, supporting the continued expansion and innovation within the digital payments ecosystem.
NayaPay Pvt. Limited has partnered with Alipay+, a cross-border digital payments and marketing platform operated by Ant International, to create a cross-border payment channel for the visitors and tourists of Pakistan and China travelling between the two countries.
Papara, a Turkish leading fintech has acquired SadaTech Pakistan Pvt. Limited (SadaPay), making it one of the most notable investments in the country’s payment industry.
Akhtar Fuiou Technologies (AFT), a licensed EMI also commenced its operations for providing financial services to underserved populations, especially farmers by developing holistic agriculture supply chain markets in rural areas.
To introduce a co-badged Domestic Payment Scheme (DPS) card, PayPak (a Pakistani domestic card scheme) has signed a Memorandum of Understanding (MoU) with one of the major International Payment Schemes during the review quarter.
Source: https://mettisglobal.news/pakistan-sees-83-digital-payments-in-q3-raast-drives-record-growth/