Khyber Pakhtunkhwa government has approved the Khyber Pakhtunkhwa Promotion of Digital Payment Act 2026, aiming to transform the province into a cashless economy through expanded adoption of digital transaction methods across businesses and public service providers. Provincial Law Minister Aftab Alam introduced the digital payments bill in the assembly, setting out a framework intended to formalize and accelerate the shift toward digital payments throughout the province.
Under the newly approved law, businesses across Khyber Pakhtunkhwa will be required to facilitate digital payments and display QR codes at shops and commercial centres, giving customers the option to pay electronically rather than relying solely on cash. The requirement will also extend to educational institutions, clinics and hospitals, all of which will need to provide digital payment facilities to the public. To prevent digital payments from becoming more costly for consumers, businesses will not be allowed to impose additional charges on customers who choose to pay through digital methods, while those refusing to accept digital payments altogether will face fines under the new law.
The legislation also grants monitoring officers the authority to inspect business premises at any time to verify compliance with the new digital payment requirements. To support businesses in adapting to these changes, newly registered businesses will receive tax relief for two years following registration, while banks and digital payment service providers will be required to offer technical assistance to help businesses set up and maintain their digital payment systems. According to the provincial government, the measure is intended to promote transparency, expand the overall volume of digital transactions taking place across the province, and encourage citizens to shift away from cash-based transactions toward a more digitally integrated economy.
The approval of the law reflects a broader push among provincial governments in Pakistan to formalize digital payment infrastructure as part of wider efforts to modernize local economies and improve transaction transparency. By mandating QR code availability and digital payment options across a wide range of business types, including retail, education and healthcare, Khyber Pakhtunkhwa is positioning itself among provinces actively working to expand the digital payments ecosystem, with the accompanying tax relief and technical support provisions designed to ease the transition for businesses adapting to the new regulatory requirements.
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