With the new Q2FY26 Payment Systems Review, the numbers change, the record books get rewritten, and yet the conclusion stays the same: Pakistan’s digital payments ecosystem, for all the grumbling about clunky apps and painful onboarding flows, is growing at a pace that is otherwise rare to find.
For starters, it notes that 92 per cent of all retail transaction volumes were conducted digitally during the quarter. There are a few caveats with this figure: first, it only naturally considers the scheduled banking universe, which, for simplicity, means your typical commercial banks. What’s not included are the day-to-day commercial dealings outside the system, such as paying your handyman or kiryana in cash. There’s simply no way of knowing for sure how much money changes hands in the economy at large each period, though velocity can certainly be estimated.
Secondly, it includes ATMs, whose whole job is to just dispense cash. By our narrower definition — comprising point-of-sale (POS), e-commerce, call centre, mobile and internet banking portal — 67.4pc of scheduled banking transaction volumes were digital in Q2-FY26, up 7.49 percentage points year-on-year (YoY). On the value side, the trajectory has accelerated sharply: 30.8pc of all throughput now flows through one of those five channels, reflecting the steepest annual increase on record at 9.89 percentage points.
Mobile banking remained, as it has for some time, the undisputed engine of this transformation, processing 620.5 million transactions worth Rs33 trillion in the quarter. That translates into annual growth of 44pc in volume and 74pc in value. On a trailing twelve-month basis, throughput crossed the Rs100tr mark for the first time, while volumes breached 2bn. Similarly, registered users reached 27.2m, adding 6.1m over the preceding year, the sharpest jump ever since data became available.
It is still early, and the retail economy has barely been scratched, but the right ingredients seem to be in place to move towards a cashless economy
On the other hand, internet banking had a quieter quarter in relative terms, up just 13pc YoY to 84.5m transactions. Throughput held up better, rising 36pc to Rs13.7tr. Over time, it has become the preferred channel for businesses rather than individual consumers, whether by design or by default.
POS, meanwhile, had its best run in years — volumes jumped 54pc to 136.3m, making it the fastest-growing channel by that measure and, notably, the first time since early 2017 that POS has outpaced mobile banking in rate of growth. However, the average ticket size has barely budged in more than a decade, despite inflation eating up the rupee’s purchasing power.
The infrastructure story has been remarkable though: the number of terminals reached 232,000, up 53pc, with over 80,000 new machines deployed during 2025 alone. That’s more than Pakistan’s entire installed base as recently as September 2021 and has been brought about due to the entry of multiple banks and fintechs into the acquiring business, a trend only expected to accelerate in the coming quarters.
Card-based e-commerce, as ever, is the exception that tests one’s patience. Throughput grew 26pc to Rs77.7bn — the lowest by an order of magnitude among important channels. While volumes did reach a fresh peak of 15.9m, it still represents a modest increase over the long term. On the other hand, bank-registered merchants nearly doubled to 17,449 by December 2025, meaning that the increment in one single year matched the cumulative total of the preceding eight and a half years.
Remember, however, that these numbers don’t include the branchless banking space, which until this quarter also includes Easypaisa to maintain consistency, despite it having transitioned to scheduled after the new license. There, the volumes are on a completely different scale, though throughput is much smaller, due to lower average ticket sizes. E-commerce illustrates this point quite well: while the card transactions have underperformed, wallet-based online retail has quietly accumulated over a trillion rupees in throughput and nearly a billion transactions over the last twelve months.
As for Raast, the national payments stack, the expansion continued at a striking pace, recording 645.8m transactions worth Rs18.5tr in the quarter, taking the 2025 aggregate to 1.97 billion transactions and Rs49.7tr — YoY growth of 118pc in volume and 190pc in value.
Peer-to-peer transfers remain the dominant use case by some distance, but the development the industry had been waiting for was the breakout in person-to-merchant payments, which clocked Rs167.6bn in throughput and 33.6m transactions in Q2FY26, compared to Rs17bn and 4.3m in the preceding quarter.
It is still early, and the retail economy has barely been scratched, but the right ingredients seem to have been put in place. For starters, the Cashless Economy initiative has pushed all banks into acquiring businesses, whether through QR, POS or some other channel. This has been complemented by incentives in the form of subsidies to help reduce the discount borne by merchants. Whether that translates into lasting behavioural change on the part of financial institutions or remains tied to governmental support is the real question. But we may not have to grapple with them for another couple of years.
Mutaher Khan is co-founder of Data Darbar and Head of InsightLab at KSBL.
Published in Dawn, The Business and Finance Weekly, March 30th, 2026