Federal Board of Revenue (FBR) has tightened regulation of cash transactions by introducing a Rs200,000 ceiling on payments, a measure that applies not only to traditional retail but also to online cash-on-delivery (CoD) orders. The new cap is aimed at improving documentation of financial flows while nudging both retailers and consumers toward digital transactions. For an economy still heavily reliant on cash, this marks a significant push toward financial formalisation, and one that could accelerate Pakistan’s shift to digital payments.
The impact of the cap is expected to be most visible in e-commerce, where CoD currently accounts for over 80 percent of orders. Consumer distrust of online payments has long kept digital adoption low, but with the ceiling in place, both retailers and platforms may be compelled to strengthen checkout systems, incentivise card and wallet payments, and invest in user trust. Shoppers who previously relied on high-value CoD purchases will now need to transition to bank transfers, debit and credit card payments, mobile wallets, or Raast-based instant settlement. This shift could expand digital payment adoption among small businesses, enhance financial inclusion, and encourage a more transparent flow of money across the economy.
For logistics and courier companies, the regulation introduces operational challenges. Orders exceeding Rs200,000 paid through CoD will either need to be rejected or split into multiple shipments, adding complexity to existing systems. However, reduced cash handling may also bring benefits, such as lowering risks of theft, fraud, and mismanagement. Retailers, meanwhile, will need to integrate more reliable digital gateways to ensure seamless transactions. The broader intent aligns with commitments under International Monetary Fund (IMF) backed reforms, which emphasise building a tax-compliant, cash-lite economy. By pushing transactions into traceable digital channels, the FBR expects to create a more accountable financial system with improved oversight and revenue collection.
Pakistan’s move mirrors similar restrictions imposed elsewhere in the region. India introduced a comparable cap of INR 200,000 in 2017, coinciding with its demonetisation drive, which accelerated adoption of digital payment systems such as UPI. Bangladesh has also set caps on cash transactions for corporate expenses, reinforcing digital trails and promoting transparency. While Pakistan’s adoption may progress more gradually due to the dominance of cash in retail and e-commerce, the direction of reform is consistent with regional efforts to digitise economies. The effectiveness of this policy will ultimately depend on how retailers adapt their systems, how consumers respond to the reduction in CoD flexibility, and how digital infrastructure is scaled to meet rising demand.
By enforcing the Rs200,000 cap, FBR is setting in motion structural changes that could redefine how transactions are conducted in Pakistan’s retail and e-commerce landscape. The measure is expected to reduce reliance on cash, improve tax compliance, and accelerate the transition to a digitally enabled economy. If embraced effectively, it has the potential to reshape consumer behaviour, strengthen trust in digital platforms, and enhance financial transparency across the board.
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