Pakistan has witnessed a remarkable 35% surge in digital payment transactions, reaching 6.4 billion in fiscal year 2024, driven by 180 million mobile phone subscribers and 100 million internet users. This growth bridges geographical divides, empowering individuals to manage finances securely and efficiently. Urban centers, particularly Karachi and Lahore, lead this transformation, while rural areas have seen 50% growth.
Digital payments now account for 84% of total transaction volume, up from 76%, with 6.4 billion transactions recorded in fiscal year 2024. Mobile banking apps and internet banking portals have seen 62% growth, processing 1,345.9 million payments valued at Rs69.8 trillion, a 74% increase.
Branchless banking wallets dominate, accounting for 42% of transaction volumes, with 2,697 million payments made through mobile apps. The growth of digital payments is fueled by innovative payment solutions and proactive regulatory measures. Digital wallets offer seamless experiences, while the National Financial Switch and Pakistan Real-time Interbank Settlement Mechanism (PRISM) enable faster, secure payment processing. Digital payments provide convenience, financial inclusion, reduced transaction costs, and transparency.
Cash transactions declined 4.16% in fiscal year 2023 and 0.52% in fiscal year 2024. Traditional bank branches’ market share plummeted from 45% in 2020 to 8.9% in 2024. Mobile banking transactions increased 70% to 1,122.8 million, while internet banking transactions grew 30% to 223 million. Point-of-sale transactions rose 36% to 271.4 million, valued at Rs1.5 trillion.
Provincial governments promote digital payments through incentives. Sindh reduced sales tax on restaurant payments from 15% to 8% for card transactions, while Punjab slashed sales tax from 16% to 5%. POS machines grew 8.9% to 125,593, enabling merchants to accept digital payments. Digital payments improve financial transparency, reducing tax evasion and financial malfeasance. However, concerns persist about financial exclusion, cybersecurity risks, and infrastructure constraints. Policymakers must ensure digital payment platforms are accessible, affordable, and user-friendly.
P2P Payments
The Raast Payments System revolutionizes domestic transactions with real-time person-to-person payments, processing 496.1 million transactions valued at Rs11,558.3 billion. PRISM enables instantaneous fund transfers, settlement of government securities, and clearing, with transactions rising from 4.9 million to 5.8 million, valued at Rs1,043.1 trillion.
To address challenges, the government launched initiatives like the National Financial Inclusion Strategy, Digital Payment Advisory Committee, and regulations enhancing mobile banking security. A national cybersecurity framework is underway. Fintech innovation drives growth, addressing challenges ensures digital payments flourish, shaping Pakistan’s economic future.
Pakistan’s digital payment revolution is still unfolding, but the momentum is undeniable. With continued innovation, collaboration between stakeholders, and a focus on inclusivity and security, this revolution has the potential to unlock immense economic opportunities and empower all segments of Pakistani society. The future of finance in Pakistan is undeniably digital.
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