KARACHI: Credit cards have failed to gain currency in Pakistan as they hold a meagre 4 per cent share in the overall card payment system due to the high-interest rates banks charge to users, mainly dominated by males.

The State Bank of Pakistan (SBP), in its third quarterly (January-March) review of Payment Systems released on Monday, stated with 37.1 million debit cards are accounting for 76.7pc of the overall cards in circulation in Pakistan followed by 9.2m Social Welfare (19.1pc), 1.9m credit cards (4pc) and 0.2pc prepaid cards.

However, the quarterly report showed that the volume of overall e-banking transactions increased by 4.3pc while the value surged by 11.2pc.

The report further said that as per the data reported by banks and MFBs, around 81pc of all debit card holders are male, 19.2pc female and less than 0.1pc fall under different categories.

Overall e-banking transactions grow 4.3pc, says SBP report

“Similar trend was noted in pre-paid and credit cards where a majority of the card holders are male,” said the SBP.

However, in the social welfare cards segment, 69pc are female and 31pc are male, it added.

Payment systems instruments adoption and acceptance of digital instruments have been increasing steadily, said the report.

As of quarter-end, total payment cards issued in Pakistan stood at 48.4m of which, 46m are issued by banks and MFBs while the remaining 2.4mon are issued by EMIs (Electronic Money Institutions).

The report said there is an increasing trend in overall large-value settlements (LVS) and retail transactions by both volume and value indicating a healthy payments ecosystem.

During the quarter Q3FY23, the number of LVS processed through the Pakistan Real-time Interbank Settlement Mechanism (PRISM) grew by 4.6pc with value increasing by 13.9pc reaching Rs171.5 trillion. Around 64pc of all PRISM transactions pertain to government securities and 32pc to customers and 3rd party funds transfers.

In addition to this, e-banking transactions also witnessed growth during the current quarter. A total of 535m e-banking transactions were processed by banks and MFB with a value of Rs44.3tr showing a growth of 3.9pc by volume and 4.1pc by value.

Mobile phone and internet banking increased by 9.9pc and 19.1pc, respectively, during the quarter. Although the volume of e-commerce transactions declined, however, its value increased by 7.1pc.

“Paper-based transactions volume in Q2FY23 was 95.5m, which has now decreased to 94.3m by the end of Q3FY23. During the same period, the value of transactions has increased by 3pc reaching Rs56.8tr,” said the report.

Published in Dawn, May 30th, 2023