Pakistan’s payments infrastructure experienced substantial growth in the second quarter of fiscal year 2024, driven by the Real-time Gross Settlement System (RTGS) and the Raast faster payment system.
According to the Quarterly Payment Systems Review (PSR) for the period of October to December 2023, digital transactions accounted for 82 percent of retail transactions, indicating a continued rise in digital payment adoption. However, in terms of value, over-the-counter (OTC) transactions still dominated, comprising 85 percent of retail payments.
The adoption of mobile app and internet banking witnessed a consistent increase, with these channels collectively representing 50 percent of total digital transactions. Mobile banking users reached 16 million, while internet banking users reached 11 million, with transactions through these channels growing by 29 percent and 15 percent, respectively.
Raast, an Instant Payment System, emerged as a significant contributor to digital financial services, processing over 107 million transactions amounting to more than Rs 2 trillion during the quarter. Since its inception in January 2021, Raast has processed a cumulative 343 million transactions, with a total value exceeding Rs 7 trillion. This growth trajectory indicates Raast’s pivotal role in digitizing Pakistan’s payments ecosystem.
E-wallets issued by Electronic Money Institutions (EMIs) are gaining popularity, particularly among segments such as youth and freelancers, with 2.7 million users registered with these EMIs. Additionally, e-commerce transactions grew by 13 percent by volume during the quarter, reflecting a growing preference for digital channels.
RTGS processed 1.5 million large-value payments amounting to Rs 273 trillion, with government securities settlements comprising 70 percent of the total value. Card-based transactions at ATMs, POS, and e-commerce platforms also experienced notable growth, with transactions totaling 235 million, 65 million, and 11 million, respectively.
Despite the growth in digital transactions, OTC transactions continued to dominate in terms of value, constituting 85 percent of overall retail transactions. However, digital channels were preferred for fund transfers and bill payments/mobile top-ups, accounting for over 90 percent and 73 percent, respectively.
Several notable developments occurred during the quarter, including the issuance of regulatory instructions for Raast P2M services, the signing of a Memorandum of Understanding (MoU) between SBP and Arab Monetary Fund (AMF) to establish cooperation between Buna and Raast for cross-border payments, and the inclusion of a new EMI, M/s Akhtar Fuiou Technologies Pvt. Ltd, to build a digital payment platform for the agri-economy. Additionally, two banks entered the POS acquiring business, and instructions were issued on the standardization of purpose lists for electronic funds transfer to enhance customer convenience.
