Despite significant advancements in Pakistan’s digital payments ecosystem, the country still faces a major challenge in achieving widespread adoption at the retail level. According to the latest figures released by the State Bank of Pakistan (SBP), only 151,000 retailers out of an estimated 5 million Micro, Small, and Medium Enterprises (MSMEs) have adopted point-of-sale (POS) machines. This means a mere 3% of the retail market currently accepts digital payments, pointing to the country’s overwhelming dependence on cash.
The SBP report underlines Pakistan’s lag in POS infrastructure compared to other developing nations. The ratio of POS devices in Pakistan stands at just one per 1,596 people, whereas India has one POS machine for every 158 individuals, and Brazil far outpaces with a ratio of 10:1. These disparities indicate how far Pakistan still needs to go to realize its goal of building a digitally inclusive economy, especially in the retail and micro-merchant segments.
To address this digital divide and promote cashless transactions at scale, Karandaaz Pakistan has introduced the “Raast Rapid Merchant Onboarding and Facilitation Entities (RMOFE)” initiative. This ambitious program is focused on onboarding physical merchants and service providers onto Pakistan’s Raast instant payment system—a platform backed by the central bank for secure, low-cost, and interoperable digital transactions.
The RMOFE program is designed to target several under-digitized segments including traditional and modern retail outlets such as kiryana stores, grocery shops, pharmacies, supermarkets, and fuel stations. It also aims to include service professionals like delivery agents, ride-hailing drivers, food delivery workers, and women-led businesses operating at physical storefronts—particularly in Tier 2 and Tier 3 cities where POS penetration is currently minimal.
Through this program, merchants will be introduced to Raast-based tools such as QR codes, Raast IDs, and IBAN-linked payments that allow seamless, real-time digital transactions without needing expensive POS hardware. Importantly, to encourage adoption during the rollout, Karandaaz will maintain a zero percent Merchant Discount Rate (MDR). Costs associated with transactions during this phase will be covered through grant funding.
Only merchants conducting ethical and lawful businesses will be eligible to participate. Karandaaz and its implementation partners, including fintech firms, digital platforms, and non-banking service providers, will be responsible for conducting thorough due diligence during the onboarding process. The program opens doors for organizations that can digitize cash-based businesses efficiently and sustainably.
The limited uptake of digital payment infrastructure despite growing smartphone usage and digital wallet penetration suggests structural and behavioral barriers. These include lack of awareness, mistrust in digital systems, infrastructure costs, and resistance to change among small business owners.
Karandaaz’s initiative, supported by SBP’s digital financial inclusion roadmap, offers a critical opportunity to break down these barriers. As the government and private stakeholders push to digitize financial transactions across the country, initiatives like RMOFE are expected to play a foundational role in expanding the digital payment footprint and steering Pakistan closer to a cashless retail economy.
