SBP has released its Quarterly Payment Systems Review for Q1 FY25, covering the period from July to September 2024. The report reveals robust growth in digital payment adoption, infrastructure expansion, and a steady move away from cash-based transactions, reflecting increasing confidence in the country’s evolving digital financial ecosystem.
According to the report, retail payments in Pakistan saw an 8% growth in volume, reaching 1,951 million transactions with a total value of Rs. 136 trillion. This surge was fueled primarily by the accelerated adoption of digital channels, which saw a 9% quarterly growth in both volume and value. Digital payments amounted to 1,699 million transactions, representing Rs. 36 trillion during the quarter. These figures highlight that 87% of retail payments by volume are now being processed digitally, underscoring the country’s shift toward modern payment methods.
A key driver of this growth has been the rise of mobile banking applications provided by Banks, Microfinance Banks (MFBs), Branchless Banking (BB) agents, and Electronic Money Institutions (EMIs). In Q1 FY25, these platforms facilitated 1,301 million transactions worth Rs. 19 trillion. This represents an 11% increase in transaction volume and a 14% rise in value compared to the previous quarter. The number of mobile banking app users also grew by 4%, reaching 96.5 million, up from 93 million in the previous quarter. These statistics highlight the increasing reliance on mobile technology for financial transactions and the growing digital literacy among consumers.
The report also sheds light on the booming e-commerce sector in Pakistan. Online e-commerce payments saw an impressive 29% increase, with 118 million transactions recorded during the quarter. Notably, 91% of these transactions were conducted via digital wallets, marking a shift away from traditional card-based systems. This trend reflects the convenience and accessibility of digital wallets, which are becoming the preferred payment method for online shopping.
To support this growth in digital payments, the infrastructure has seen significant advancements. The number of Point-of-Sale (POS) terminals increased to 132,224, facilitating 83 million transactions worth Rs. 429 billion. Additionally, the ATM network expanded to 19,170 units, handling 243 million transactions valued at Rs. 3.9 trillion. While ATMs remain a crucial channel for cash withdrawals, the growth in POS terminals indicates a broader acceptance of digital payments across retail markets.
A notable effort in promoting financial inclusion has been the role of branchless banking agents, particularly in underserved rural and remote areas. The report highlights that 693,178 agents processed 28 million bill payments and mobile top-ups and facilitated 75 million cash deposit and withdrawal transactions during the quarter. The growth in retail merchants accepting digital payments saw a 16% increase, driven by branchless banking initiatives that promote the use of mobile wallets, QR codes, and other digital tools. These efforts are helping bridge economic disparities by bringing financial services to previously excluded populations.
The success of the Raast instant payment system was another milestone covered in the report. During Q1 FY25, Raast processed 197 million transactions worth Rs. 4.7 trillion. The system’s efficiency in facilitating instant payments for both individuals and businesses is enhancing the overall digital payment experience in the country. Raast’s continued adoption indicates a future where fast, seamless, and secure transactions are the norm.
SBP emphasized that the progress in Pakistan’s payment ecosystem is a result of the combined efforts of banks, fintech companies, payment service providers, and regulators. This collaborative approach has fostered innovation, accessibility, and financial inclusion on a national scale. The focus on enhancing digital infrastructure and adopting modern technologies reflects a broader vision of a digitally empowered Pakistan.
