Another week, another report from the State Bank of Pakistan (SBP). It’s the Payments Systems Review for July-September. It reveals that the total payments transactions grew by 23 per cent year-on-year in volume and 8pc in value in the first quarter of 2020-21.

Mostly the report tells us what we have already been seeing for a long time: PRISM transactions still take up the lion’s share by value, thanks to their large ticket size; paper-based transactions coupled with ATM cash withdrawals lead by a margin in terms of volume; and e-banking transaction amounts are on a healthy — but not radically — upward trajectory (22pc year-on-year growth in the latest period).

Each of the four components of mobile banking more than doubled in July-September

But dig in a little deeper and you can see a few major trends underway.

The most meaningful is mobile banking’s share in the total e-banking value surged to 4.75pc in July-September from just 1.87pc in the corresponding period of last year. This marked a fast convergence with internet banking whose shares in the respective periods were 5.68pc and 3.68pc. This was accompanied by an addition of 2.61 million mobile and 875,284 internet banking users in July-September over the same quarter of 2019-20.

Much of the gains by mobile banking were made in the April-June quarter, lending some weight to the hypothesis that Covid-19 triggered a shift towards digitisation in Pakistan. And the improvement was across the board as each of its four components more than doubled: intrabank fund transfers surged 162pc year-on-year to Rs320.2 billion in July-September, interbank 264pc to Rs426.9bn, utility bills 214pc to Rs34.2bn and miscellaneous payments 206pc to Rs127.5bn.

On the flip side, the share of e-commerce in overall e-banking hasn’t posted any worthy improvement. It was just 0.06pc in the latest period as opposed to 0.02pc in the first quarter of 2016-17 — an increase of only four basis points in an equal number of years. This is despite a big jump in the supply side as proxied by the number of merchants registered with banks. Their number soared by 53.5pc to 2,164 in the period under review, from 1,410 a year ago.

Another noticeable change is the growing share of debit cards in point-of-sale transactions compared to credit, which has receded some ground. The former rose to occupy 54.18pc of the total POS value in the first quarter of the current fiscal year from 48.67pc in the corresponding period last year while the latter fell to 45.2pc, from 50.82pc.

The report also offers some other interesting numbers. For example, 3,857 PoS machines were added in July-September over the preceding quarter. Or that ATM-only cards have been on a consistent decline, falling by more than a million since the first quarter of 2019-20.

One thing seems apparent: the SBP is becoming quite proactive in pushing the digitisation reforms, be it through easing regulations by doing away with E-forms for small e-commerce exports or consulting with the industry or publishing strategies. Even when it comes to publishing data, there appears to be some effort in bringing more transparency into the existing system. However, what’s extremely strange is that the relevant authors/communications department officials of the central bank don’t find it worthy of their time to engage with the media or at least answer questions.

And mind you, there are plenty of them, including on the consistency (or lack thereof) of certain data points across different SBP documents. For example, there is a significant mismatch in the e-commerce spend through digital/e-banking channels in two successive reports published by the central bank. Attempts to understand the methodology and their assumptions behind the figures have so far been futile.

Published in Dawn, The Business and Finance Weekly, December 7th, 2020

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