There are nearly 50m debit cards in Pakistan, several times more than the roughly 2m credit cards that people own, according to the Annual Payment Systems Review Report FY24 by the State Bank. In the last fiscal year, roughly Rs16tr worth of transactions took place across ATMs, point of sale and e-commerce, a 3x increase since FY20.

However, while the volume of transactions by debit cards has increased steeply, the average amount per transaction has remained relatively the same. This suggests that although people use debit cards more frequently, they may not use them for a larger share of their overall spending.

Unsurprisingly, the most significant use of debit cards is ATM machines — cash withdrawals from ATMs account for 92pc of the value of all debit card transactions.

According to the report, cash withdrawals from banks were Rs42tr in FY24, up from Rs22tr since 2020, indicating that the highest quantum of the value of transactions is through cash withdrawals at bank branches. Cash in circulation in the country has increased by a third over the last four years. In September 2020, there was Rs6tr cash in circulation compared to Rs9tr in September 2024.

Undoubtedly, the country’s pace of digitisation has increased, and not just because of a small base effect. However, cash remains supreme.

Published in Dawn, The Business and Finance Weekly, October 14th, 2024