KARACHI: Despite mounting pressure on banks to go digital, the number of e-commerce transactions declined in the first half of the current fiscal year while the total e-banking value in the first quarter also dipped.

The State Bank of Pakistan (SBP) on Tuesday issued both the first and second quarterly reports on the Payment System for 2022-23. The reports reflect that despite all efforts electronic payments still need the trust of the account holders. One of the key indications is the Banking Ombudsman’s reports showing that complaints have been increasing particularly about e-transactions.

At the same time, the value of paper-based transactions significantly increased from Rs46.6 trillion in Q2FY22 to Rs54.8tr in Q2FY23, suggesting growing trust in paper-based transactions.

“Number of e-commerce transactions in both quarters declined but the value increased by 11.6pc during Q1FY23 and 2.2pc in Q2FY23,” said the SBP reports. The increased value with a lower number of transactions indicates high inflation which slashed the value of PKR.

SBP reports massive growth in Raast users to 25.8m

During the quarter Q1FY23, total e-banking transactions witnessed a growth of 4.1pc in volume while value declined by 5pc, said the SBP.

However, in quarter Q2FY23, e-banking transactions grew by 12.6pc to 515 million and the value by 6.5pc to Rs42.5tr, respectively.

Raast, Pakistan’s first cost-efficient instant payment system, witnessed promising growth as the number of its users increased from 15m as of Q4FY22 to 21.1m by Q1FY23 and 25.8m by Q2FY23 showing a growth of 72pc since June 2022.

The number of transactions processed through Raast increased from 7.1m to 21.5m (202.1pc) while the value increased from Rs98.4bn to Rs578.6bn (488.1pc) since Q4FY22.

Since Q4FY22, internet and mobile phone banking users have increased by 21pc (10.1m users) and 22 per cent (15m users) respectively.

Transactions through internet and mobile phone banking channels also showed continued growth in both quarters with combined quarterly growth of both channels of 11pc by volume and 11pc by value in Q1FY23 while in Q2FY23, volume grew by 18pc and value by 15pc.

Point-of-Sale (POS) deployed across the country grew 3.8pc to 108,899 in Q2FY23. From July to December 2022, a total of 94.8m transactions amounting to Rs493.2bn were processed at POS terminals.

The number of ATMs also increased from 17,133 in Q4FY22 to 17,547 by Q2FY23.

Payment cards in circulation issued by banks and MFBs at the quarter end of Q4FY22 were 43m which increased to 46.5m by the end of Q2FY23. The majority of the issued cards are debit cards (73.8pc) followed by Social Welfare cards (21.8pc), credit cards (4.1pc) and Prepaid cards (0.2pc).

The meagre growth in credit cards is showing that they have failed to make any reasonable place in the market mainly due to a very high markup rate.

Published in Dawn, April 12th, 2023

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