Karachi, September 27, 2023 – Pakistan has experienced a remarkable 81 percent increase in payments made through mobile phones and internet banking during the fiscal year 2022-23, as indicated by a report released by the central bank on Wednesday.
The State Bank of Pakistan (SBP) issued its Annual Payment Systems Review for the fiscal year 2022-23, which highlights the growth and trends in banking transactions, along with the utilization of payment systems and instruments across the country.
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According to the report, the surge in digital transactions can be attributed to consumers’ growing preference for digital channels, particularly mobile and internet banking, to meet their financial needs. Overall, mobile and internet banking transactions witnessed an impressive annual growth of 57 percent by volume and a staggering 81 percent by value.
Additionally, e-Banking transactions conducted through banks and Microfinance Banks (MFBs) grew by 29 percent in volume, with the value increasing by 21 percent over the year. A similar growth pattern was observed in Branchless Banking (BBs) transactions, with the number of transactions increasing by 28 percent and the value surging by 45 percent during FY23.
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The report also highlights a significant increase in the number of e-banking users. The year saw a 15 percent increase in internet banking users, a 30 percent increase in mobile banking users, and a 42 percent increase in BB mobile app users. Electronic Money Institutions (EMIs) have also played a meaningful role in expanding digital banking users by opening more than 2 million e-wallets since their inception.
Efficiency and instant payment solutions have made e-banking increasingly attractive to customers, leading to steady growth in transactions over the years. In contrast, paper-based transactions have declined by more than 4 percent during FY23 and by a cumulative total of around 20 percent over the past five years. However, the value of paper-based transactions increased by 20 percent in FY23.
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Pakistan’s Real-Time Gross Settlement (RTGS) system and Raast – Pakistan’s Instant Payment System, operated by SBP, have facilitated financial institutions and banking customers in processing and settling transactions. During the year, RTGS processed 4.9 million transactions totaling PKR 640.4 trillion, while Raast processed 155 million transactions amounting to PKR 3.2 trillion during the fiscal year.
Financial institutions have been expanding their e-banking infrastructure by increasing the number of Point-of-Sale (POS) terminals, Automated Teller Machines (ATMs), Cash/Cheque Deposit Machines (CDMs), and e-commerce merchants and agents’ networks to meet customers’ needs. As of June 30, 2023, there were 115,288 POS terminals, 17,808 ATMs, 520 CDMs, and 6,889 e-commerce merchants providing payment services to customers. During the fiscal year, transactions through POS (199.3 million) and ATMs (809.7 million) grew annually by 45 percent and 17 percent, respectively. Domestic e-commerce transactions using payment cards reached 31.8 million, amounting to PKR 142 billion during the year.
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As of June 30, 2023, there were 58.1 million payment cards in circulation, with 44.5 million issued by banks and MFBs, 10.8 million by branchless banks, and 2.8 million by EMIs.
