THE government’s push to fast-track the transition to a cashless economy could be Pakistan’s dream leap into the future. At a meeting on his cashless economy initiative, Prime Minister Shehbaz Sharif was briefed on plans to expand Raast services nationwide to facilitate the creation of a single digital financial identity for every citizen by integrating their national identity, biometrics and mobile numbers. Ambitious targets have been set to accelerate mobile banking and fintech adoption under the initiative: raising the number of active digital merchants to 2m by June, increasing mobile/internet banking users from 95m to 120m, routing all remittances through the formal channels and doubling annual digital transactions to 15bn. These goals are ambitious but achievable. With more than 143m broadband users and nearly 40m monthly active mobile wallet users — now outnumbering traditional bank account holders — Pakistan is ready to embark on its shift to a cashless economy. An early transition to digital transactions offers wide-ranging benefits, including efficiency, transparency and reduced corruption. For individuals and small businesses, digital finance offers access to loans, savings, insurance services and social protection transfers. For low-income groups and women, it opens the door to financial inclusion. For overseas Pakistanis, it ensures safer, cheaper and transparent remittances. And for the broader economy, it enhances documentation, widens the tax net and curbs leakages.

Yet scaling up the cashless economy faces several challenges. Digital literacy is low, particularly in the rural areas. Public trust in digital platforms is fragile because of real and perceived fraud risk. Most businesses still prefer cash to avoid tax payments. Patchy internet coverage and limited access to the digital infrastructure outside big cities coupled with frequent internet outages make cash a necessity for many. Therefore, the latest push towards a cashless future for the country is an important and forward-looking step to align Pakistan’s economy with global trends. If the effort bears fruit, it will prove to be one of the country’s most transformative reforms and hopefully put the economy on the global map. But the successful execution of this initiative demands more than everyday rhetoric. Much depends on the steady and consistent implementation of the goals set under it to strengthen public confidence in the digital payment system and tax reductions on digital transactions, besides other incentives for those who avail of it.

Published in Dawn, August 19th, 2025