89pc of all retail payments are now digital, says SBP report

KARACHI: The State Bank of Pakistan (SBP) has released its Payment Systems Quarterly Review for the third quarter of the fiscal year 2024-25 (Q3FY25), revealing strong momentum in digital payment adoption across the country.

The report paints a promising picture of a rapidly digitizing financial landscape, driven largely by mobile app-based banking and instant payment platforms like Raast.

RETAIL PAYMENTS

Retail payments surged to 2.4 billion transactions during Q3FY25, representing a 12 per cent growth from the previous quarter. The total value of these transactions reached Rs164 trillion, up 8 per cent, showing a strong appetite for both digital and traditional banking services.

More notably, however, is that digital payments accounted for 89 per cent of retail transactions by volume, crossing the 2 billion mark for the first time. In terms of value, Over-the-Counter (OTC) channels like bank branches and branchless banking agents still dominated with a 71 per cent share (Rs117 trillion), while digital channels handled Rs48 trillion (29 per cent).

MOBILE APPS

The report shows a standout trend of explosive growth in mobile app-based payments. Banks, branchless banking providers, and Electronic Money Institutions (EMIs) collectively processed 1.686 billion transactions through mobile apps, worth Rs27 trillion, reflecting a 16 per cent increase in volume and a 22 per cent increase in value.

User adoption is also on the rise. Mobile banking app users reached 22.6 million (up by 7 per cent), while wallet users of branchless banking (BBs) and Electronic Money Institutions (EMIs) rose to 68.5 million (up by 6 per cent) and 5.3 million (up by 12 per cent) respectively.

INTERNET AND CARD-BASED PAYMENTS

Internet banking usage continued to rise steadily with 14.1 million users conducting 71 million transactions worth Rs9.6 trillion. While debit cards remained the dominant form of plastic money, 57.5 million payment cards were in circulation, facilitating a combined 408 million transactions across ATMs, PoS terminals, and e-commerce platforms.

ATMs, now numbering 19,851 nationwide, processed 271 million transactions worth Rs4.8 trillion. Meanwhile, the number of PoS terminals rose to 179,383, with daily purchases surpassing 1 million transactions across 140,861 merchants.

E-COMMERCE AND DIGITAL WALLETS

The digital commerce sector witnessed significant growth, with 213 million online transactions, a 40 per cent increase in volume and 34 per cent in value (Rs258 billion). Digital wallets and account-based payments dominated the space, making up 94 per cent of the volume and 74 per cent of the value, underscoring a growing consumer preference for cashless, seamless online transactions.

RAAST

SBP’s instant payment system, Raast, continued its upward trajectory. Person-to-Person (P2P) transactions climbed by 25 per cent to 368 million, worth Rs8 trillion (up by 31 per cent). The Person-to-Merchant (P2M) service also gained traction with over 770,000 merchants onboarded, and transactions more than doubling to 1.5 million, valued at Rs4.5 billion.

FINANCIAL INCLUSION

The SBP report also talks about payment ecosystem’s continued expansion, saying that is visible not only in digital channels but also in physical infrastructure. Pakistan now has 19,170 bank branches and 722,361 branchless banking agents. While transactions at bank branches declined by 3 per cent, BB agents saw a 6 per cent increase, handling 123 million payments worth Rs900 billion.

Furthermore, 778,936 retail merchants have now been enabled to accept digital payments through QR codes and mobile wallets, collectively processing 22 million payments worth Rs61 billion this quarter.

Also read: Pakistan, ADB sign $350m loan deal to help expand women’s role in financial sector

Web Desk