The Khyber Pakhtunkhwa government has tabled legislation aimed at accelerating the province’s transition toward a cashless economy, introducing the Digital Payment Act 2026 in the provincial assembly. The bill was presented by Law Minister Aftab Alam and proposes making digital payment methods compulsory for businesses operating across the province, spanning both urban centres and rural areas. The scope of the legislation is broad, covering shops, commercial outlets, educational institutions, clinics, and hospitals effectively placing the obligation to accept digital payments on nearly every category of formal business operating within Khyber Pakhtunkhwa.
A central feature of the proposed law is the mandatory display of Quick Response, or QR, codes at business premises to facilitate customer payments in a manner that is straightforward, secure, and accessible. The legislation explicitly prohibits businesses from imposing additional charges on customers who opt to pay digitally, a provision aimed at removing a common deterrent that has historically discouraged consumer adoption of cashless payment methods in Pakistan’s retail and services sectors. To ensure compliance, the government intends to appoint authorised monitoring officers who will conduct inspections at business locations, with financial penalties proposed for establishments that fail to implement the required systems within the stipulated timeframe. Officials have framed the initiative as a tool for improving financial transparency, reducing the volume of undocumented transactions, and strengthening economic accountability across the province.
Recognising that the shift to digital infrastructure carries an upfront cost for many businesses particularly smaller enterprises the government has built transition support measures into the proposed framework. Newly registered businesses will be entitled to tax relief for a period of two years, providing a financial cushion during the adoption phase. Banks and digital service providers will additionally be tasked with furnishing technical support to help businesses onboard digital payment solutions, ensuring that the legislative mandate is matched by practical enablement on the ground. The Digital Payment Act 2026 represents one of the more assertive provincial-level pushes toward formalising digital commerce in Pakistan, and if enacted, would position Khyber Pakhtunkhwa as a leading example of subnational policy-driven financial modernisation in the country.
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