KARACHI: Retail payments through digital channels grew 9 per cent in volume to 1,699 million transactions valuing Rs36 trillion in the first quarter (July-September) of FY25, reported the State Bank of Pakistan (SBP) on Friday.

In its Quarterly Payment Systems Review for Q1FY25, the SBP said the overall retail payment transactions rose 8pc to 1,951 million transactions valuing Rs136tr.

The report said digital channels handle 87pc of retail payments by volume, reflecting the growing public trust.

“Mobile banking apps provided by banks, MFBs, BBs and EMIs played a pivotal role in this growth, with 1,301 million transactions amounting to Rs19tr being carried out through these apps during the quarter, reflecting an 11pc rise in volume and 14pc in value,” said the report.

Quarterly report says mobile banking apps driving growth

The collective number of mobile banking app users grew by 4pc to 96.5m from 93m in the preceding quarter.

E-commerce is also emerging as an integral component of Pakistan’s digital payment landscape, with a 29pc increase in online e-commerce payments.

“Of the 118m online e-commerce payments during the quarter, 91pc were conducted through digital wallets, signifying a shift from traditional card-based systems,” said the report.

Point-of-Sale (POS) terminals expanded to 132,224, enabling 83m transactions worth Rs429 billion.

Furthermore, the ATM network grew to 19,170 units, facilitating 243m transactions worth Rs3.9tr, maintaining its key role as a cash withdrawal channel.

The report also highlights the success of the Raast instant payment system, which processed 197m transactions worth Rs4.7tr.

Pakistan’s payment ecosystem continues to thrive due to the combined efforts of banks, fintechs, payment service providers, and regulators.

This collaborative approach has fostered innovation, accessibility, and a greater sense of financial inclusion across the country, said the report.

Efforts to include underserved segments have gained momentum, with branchless banking agents playing a critical role in extending financial services, especially in rural and remote areas.

Over 693,178 agents processed 28 million bill payments/mobile top-ups and 75 million cash deposit and withdrawal transactions during the quarter.

Retail merchants accepting digital payments witnessed a 16 per cent growth, driven by branchless banking initiatives that enable payments through mobile wallets, QR codes, and other digital tools.

“These developments underscore the importance of alternative financial channels in bridging economic disparities across regions,” said the report.

Published in Dawn, December 21st, 2024