The push toward a fully documented and cashless economy in Pakistan has taken a significant leap forward as Karandaaz Pakistan and the Better Than Cash Alliance, a global partnership hosted by the United Nations Development Programme, officially joined forces. The two organizations are formally collaborating to accelerate the adoption and growth of digital merchant payments across the country. To anchor this strategic partnership, a multi-stakeholder platform called the National Merchant Payments Working Group is being established to drive digital payment acceptance, focusing heavily on utilizing the state-backed inclusive instant payment system, Raast.
Although Pakistan has made major strides in its digital financial architecture recently, particularly with the rollout of the Raast person-to-merchant payment strand, retail merchant adoption across the country has remained uneven. This newly formed initiative specifically aims to bridge that critical gap by reducing operational friction during merchant onboarding, resolving systemic technical bottlenecks, and actively advancing financial inclusion for women entrepreneurs and small businesses. By targeting these specific segments, the partnership seeks to convert everyday retail transactions into a fully traceable, efficient digital format.
Formed under the direct stewardship of the State Bank of Pakistan, the National Merchant Payments Working Group will function as a neutral, industry-wide coordination platform dedicated to advancing merchant digitization. Pulling from successful implementation models across leading regional markets, the working group acts as a collaborative nexus. It brings together commercial banks, financial technology companies, digital payment service providers, merchant acquirers, retail merchant associations, and other vital stakeholders from across the domestic financial ecosystem.
The primary objective of the working group is to facilitate open, industry-wide dialogues that can pinpoint lingering market barriers, co-create practical digital solutions, and generate actionable recommendations to aid upcoming policy and regulatory adjustments. Beyond advisory functions, the collective forum is tasked with designing and executing time-bound proofs of concept to test and deploy merchant acceptance technologies in real-time retail environments. By forcing closer cooperation between the private fintech sector and state policymakers, the group intends to deliver a seamless digital payment experience that unlocks fresh economic advantages for small businesses.
According to statements from executive leadership, moving beyond simple peer-to-peer transfers toward everyday business digitization is essential for achieving a truly cashless society. Waqas ul Hasan, Chief Executive Officer of Karandaaz Pakistan, emphasized that the collaboration provides small businesses with a structured space to transition away from cash safely. Similarly, Nshuti Mbabazi, Managing Director of the Better Than Cash Alliance, noted that while Pakistan’s digital merchant ecosystem holds immense untapped potential, adoption scale has been restricted by questions of affordability and commercial viability. The working group aims to align suppliers and financial providers around shared commercial incentives.
The division of labor within the partnership leverages the unique strengths of both entities. The Better Than Cash Alliance injects extensive global expertise into the project, drawing from practical, in-country advisory services executed across Asia, Africa, and Latin America, alongside its high-level financial inclusion advocacy within the G7 and G20 frameworks. Karandaaz Pakistan complements this global experience with its deep domestic network spanning local commercial banks, fast-moving fintech startups, and state regulators. Moving forward, the group will prioritize building consensus around sustainable payment models and consolidating local data to assist state regulatory authorities in shaping future digital banking policies.
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