KARACHI: The State Bank of Pakistan (SBP) has said that the transactions of internet banking posted 20 per cent growth in the third quarter of the current fiscal year.
According to the report the transaction volume of internet banking increased to Rs2.9 trillion by end of quarter January – March 2022 as compared with Rs2.42 trillion in the quarter October – December 2021.
The SBP released its third quarterly report of Payment Systems for the Fiscal year 2021-22 on Thursday covering the period January to March 2022. The report presents an overall viewpoint of growing digital adoption in the country as SBP continues to promote robust and efficient payments ecosystem in the country.
During the quarter under review (Q3-FY22), total e-banking transactions witnessed a growth of 2.6 per cent in volume and 6.5 per cent in value on QoQ basis while the overall growth was 32.7 per cent in volume and 57.5 per cent in value on YoY basis.
Further bifurcation shows that a major portion of this growth was driven by continuing widening in internet banking and mobile banking transactions. Number of registered internet banking users reached 7.6 million showing a growth of 10.6 per cent resulting in a double digit-growth of 13.5 per cent and 19.9 per cent in volume and value of transactions respectively on QoQ basis.
Through this channel a total 38.3 million transactions worth Rs. 2,906.9 billion were processed. Mobile banking transactions volume was 101.5 million with value of Rs. 3,085.8 billion which amounted to a growth of 8.1 per cent and 5.4 per cent respectively on QoQ basis.
Under retail sector, POS transactions continued to show an upward trend. During this period, number of POS terminals installed reached to 96,975 as compared to 92,153 in the previous quarter, showing an increase of 5.2 per cent.
Through these POS terminals, a total of 38.3 million transactions were processed that amounted to Rs. 189.7 billion in value. This shows quarterly growth of 21.9 per cent in volume and 6.5 per cent in value of transactions.
Number of ATMs reached 16,897 with transactions volume and value of 171.3 million and Rs. 2,437.0 billion respectively. Similarly, number of e-commerce merchants on boarded with banks also showed a double-digit growth of 12.0 per cent reaching to 4,445.
A total of 9.1 million e-commerce transactions were conducted which amounted to Rs. 27 billion during the quarter. Both volume and value showed an impressive growth of 62.8 per cent and 77.1 per cent respectively, on YoY basis, in case of e-commerce transactions.
Paper based transactions declined by -2.9 per cent in volume though its value remained almost at the same level posting only 0.6 per cent growth over the previous quarter. In case of RTGS (PRISM), the real-time gross settlement system of Pakistan, a total of 1.08 million transactions amounting to PKR 155.7 trillion were processed.
A total of 47.2 million payment cards were in circulation at the quarter end of Q3-FY22. Those payment cards mostly comprised of debit cards (62.3 per cent), social welfare cards (23.3 per cent), ATM only cards (10.3 per cent), credit cards (3.7 per cent) and lastly Pre-paid cards (0.3 per cent).
KARACHI: The e-banking based transactions have increased by 23 per cent to Rs33.38 trillion during the quarters of October – December 202 as compared with Rs27.19 trillion in the previous quarter (July – September 2021), the State Bank of Pakistan (SBP) said on Friday.
The SBP issued quarterly report stating that the volume of e-banking recorded 10.7 per cent to 400 million transactions as compared with previous quarter of 361.6 million.
E-banking includes transactions conducted via electronic channels including real-time online Branches, ATMs, mobile banking, internet banking, call center banking, POS and e-Commerce.
It would be pertinent to note that the growth in e-banking transactions is much steeper relative to paper based transactions, albeit the value of transactions is higher in the case of later.
The volume and value of paper based transactions increased by 3.4 per cent and 12.2 per cent respectively.
While the volume of e-banking transactions is almost four times higher at 400 million than paper based transactions at 101.4 million, the value of transactions of the former stands at Rs33.4 trillion compared with Rs41.6 trillion paper based transactions.
All around growth in e-banking included expansion in both mobile and internet banking with a double-digit increase in value and volume of transactions during the second quarter. The number of mobile banking transactions amounted to 94 million, while the value reached Rs2.2 trillion, which comes to 18.8 per cent and 35.4 per cent growth respectively on QoQ basis. Meanwhile, number of mobile banking users grew by 5 per cent on QoQ basis, reaching a total of 11.9 million users. The internet banking users reached 6.9 million, conducting 33.8 million transactions, amounting to Rs2.4 trillion, which translate to a strong 13.9 per cent progress in terms of volume and 28 per cent increase in the value of these transactions compared to preceding quarter.
Retail sector also continued its upswing in adoption of digital payments. During the quarter, a total of 31.4 million transactions amounting to Rs178.1 billion were processed via 92,153 Point-of-Sale (POS) terminals. This shows an impressive double-digit QoQ growth of 11.8 per cent by volume and 32.1 per cent by value. Similarly, the number of e-Commerce merchants also increased by 32.6 per cent reaching a total of 3,968. Onboarding of QR merchants largely added to this growth. These merchants processed 13.6 million transactions worth Rs26.7 billion, showing QoQ growth of 7.2 per cent by volume and 19.8 per cent by value.
As of end-December 2022, there were 5.4 per cent more cards than the preceding quarter, reaching 48.6 million cards in circulation which mainly comprised of Debit Cards (63.5 per cent), Social Welfare Cards (22.8 per cent), ATM only Cards (9.9 per cent), Credit Cards (3.6 per cent), and Prepaid Cards (0.3 per cent). During this quarter, paper based transactions showed relatively slower growth of 3.4 per cent in volume and 12.2 per cent in value on QoQ basis. In Large-value (wholesale) payments segment, SBP’s Real-time Inter-Bank Settlement Mechanism (PRISM) processed a total of 1.1 million transactions amounting to Rs161.3 trillion, showing QoQ growth of 5.9 per cent in volume and 1.4 per cent in value.
KARACHI: The e-banking transactions recorded a significant increase during the fiscal year 2020/2021 as transactions worth Rs86.48 trillion were recorded through these channels.
According to a report recently issued by the State Bank of Pakistan (SBP), during 2020/2021, about 1.2 billion transactions of valuing Rs86.5 trillion were processed through retail e-banking channels.
These transactions showed growth of 30.6 per cent and 31.1 per cent in volume and value of transactions, respectively when compared with 905.9 million and Rs65.98 trillion during the last fiscal year.
In total e-banking transactions, Real-Time Online Branches (RTOBs) transactions accounted for the largest share of 77.8 per cent in value of transactions with a volume share of 15.8 per cent whereas ATMs have the largest share of 50.6 per cent in volume of transactions with a value share of 9.3 per cent only.
RTOB Transactions
RTOB channel provides online banking facility to all its customers across the whole branch network of the same bank. During the year under review, this channel processed 186.6 million transactions of Rs 67.3 trillion. These transactions depicted YoY growth of 7.4 per cent and 23.7 per cent in volume and value of transactions respectively.
During FY21, in terms of the number of transactions, cash deposit transactions have the highest share of 46.6 per cent (86.9 million) in total RTOB transactions volume-wise whereas intra-bank funds transfer transactions to other branches have the highest share of 70.0 per cent (Rs 47.1 trillion) in terms of the value of total RTOB transactions.
ATM Transactions
Pakistan is one of those countries where cash is still the dominant mode of making payments and performing transactions. It is evident from a significant increase in ATM transactions that ATMs are still the most widely used payment channel across the country, particularly for cash withdrawal transactions.
As on end June 2021, the total number of ATMs was 16,355 in the country. This accounts for approximately 7.7 ATMs touchpoints for every 100,000 people. During FY21, ATMs processed 598.7 million transactions with a value of Rs 8.1 trillion. It amounts to a YoY change of 16.9 per cent by volume and 25.6 per cent by value. During the year under review, the average size of ATM transactions was approximately Rs 13,489 per ATM transaction and 36,607 transactions were processed per ATM, compared with the average size of Rs 12,555 per ATM transaction and 32,801 transactions processed per ATM last year.
Further, the ratio of On-Us versus Off-Us Cash withdrawal was approximately 60:40 by volume and 67:33 by value which shows that customers mostly prefer to withdraw cash from their own bank’s ATMs.
Internet Banking Transactions
Banks are offering a variety of financial services through Internet Banking (IB) like Intra-bank & Interbank Fund transfer, scheduled fund transfers, Utility Bills Payments, Mobile Airtime top-ups, Intra-bank credit card payments, school fee payments, etc.
As on end June 2021, 27 banks were offering Internet Banking and there were 5.2 million registered Internet Banking Users with these banks. During the year FY21, this channel processed 93.4 million transactions amounting to Rs 5.7 trillion.
These transactions showed a YoY growth of 65.1 per cent and 91.7 per cent by volume and value respectively. In the total Internet Banking transactions, the share of Intra-Bank Funds transfer transactions is 35.0 per cent (32.7 million) and 36.8 per cent (Rs 2,084.2 billion) in volume and value of transactions respectively whereas the share of Inter-Bank Funds transfer transactions in volume and value of transactions is 41.5 per cent (38.8 million) and 43.1 per cent (Rs 2440.3 billion) respectively.
Utility Bills Payments contributed 18.1 per cent (16.9 million) in volume and 8.2 per cent (Rs 464.5 billion) in value of transactions and the residuals share is contributed by other miscellaneous payments including merchant payments, mutual funds payments, zakat, charities, etc. The substantial growth witnessed during the last few years in the Internet Banking channel is quite encouraging.
The push received from COVID-19 last year also resulted in remarkable growth in internet banking transactions in FY21.
Mobile Banking Transactions
Mobile Phone/App-based Banking is being offered by 27 Banks/ MFBs to 10.8 million registered users as of June 2021. This Channel processed 193.4 million transactions worth Rs 4.9 trillion during FY21 showing a YoY growth of more than double the volume and value of transactions, more precisely, it registered a YoY growth of 133.6 per cent and 178.7 per cent in volume and value of transactions respectively.
In the last 5 years, significant progress has been observed in the usage of Internet Banking and Mobile Banking channels showing annualized transaction growth of 38.3 per cent and 106.1 per cent respectively.
Intra-bank and Inter-bank fund transfers were the main contributors in total Mobile Phone Banking transactions. Intra-bank fund transfers contributed 20.1 per cent (38.9 million) transactions by volume and 34.6 per cent (Rs 1,702.8 billion) transactions by value while Interbank fund transfers contributed 44.8 per cent (86.6 million) transactions by volume and 51.2 per cent (Rs 2,516.0 billion) transactions by value.
Utility Bills Payments had the volume of 31.1 per cent (60.1 million) transactions and 2.2 per cent (Rs 106.2 billion) transactions by value within overall Mobile Banking volume and value of transactions respectively and insignificant residual share is contributed by miscellaneous payments using Mobile Phone Apps.
The channel depicted a growing trend of transactions. During the year, FY21, it showed a substantial growth compared to the previous years, as is evident from the trend shown in figure 2.5 above.
It is quite evident that Mobile Banking has been the preferred source of conducting transactions and making payments by the consumers, just because of the fact that the channel has observed more than double increase in terms of both volume and value of transactions during the year under review.
Call Center/ IVR Banking Transactions
During the year FY21, Call Centers/ IVR Banking Channel processed 0.3 million transactions amounting to Rs 8.1 billion. This channel facilitates both Intra and Inter-Bank Funds transfers. Mostly Banks/MFBs high valued customers are also allowed to use this channel for Utilities Bill Payments. As on the end-June 2021, there were 33.4 million Call Centers/IVR Banking Channel registered users.
Digital Adaption by Merchants
Despite the economic downturn during the COVID-19 pandemic, it is quite promising that e-commerce transactions during recent years have seen continuous growth, leading to the belief that the general consumers are realizing the benefits of paying through cards instead of paying through cash, which includes transparency in payments, no hassle of carrying change, paying any amount directly from the account, and avoiding unnecessary carrying of cash at all times.
Card Present – POS Transactions
In Pakistan 5 banks are in the business of open-loop POS acquiring whereas, 4 banks are providing closed-loop services on POS.
The turnover of 88.8 million POS transactions valuing Rs 453.1 billion was recorded in FY21 as compared to 70.3 million transactions valuing Rs 364.2 billion in FY20, showing a YoY growth of 26.3 per cent by volume and 24.4 per cent by value of transactions.
POS transactions have a 7.5 per cent share in the total volume of transactions with a value share of 0.5 per cent showing low uptake of merchant onboarding and insignificant usage of debit cards for retail transactions. The increase in POS transactions can be attributed to the reopening of shops and markets as the lockdown was gradually lifted on an on-and-off basis.
Card-not-Present – e-Commerce
There were 3,003 locally registered e-Commerce Merchants having their merchant accounts in 6 banks as of end-June 2021 compared to 1,707 Merchants last year, showing significant growth of 75.9 per cent boarding of e-Commerce merchants in the country.
In Pakistan, International Payment Gateway Services (IPGs) are being provided by 4 banks, whereas 2 microfinance banks were also working as merchant aggregators and are providing e-commerce gateway to their clients while leveraging on 4 IPGs in Pakistan. Consumers carried out 21.9 million online transactions worth Rs 60.6 billion on these locally registered e-Commerce Merchants during the year FY21 through cards. These transactions showed significant YoY growth of 114.8 per cent and 74.1 per cent by volume and value of transactions respectively.
In addition to the above, domestically issued Debit, Credit, and Pre-paid cards collectively processed 33.6 million transactions of Rs 124.6 billion on local and international e-commerce merchants. Debit cards took the lead with the highest share of transactions i.e., 67.0 per cent (22.5 million) in volume; when it comes to value, credit cards registered the highest share with 49.8 per cent (Rs 62.0 billion).
It is worth mentioning that the number of transactions per debit card issued (0.75 transactions) is very less when compared with e-commerce transactions processed per credit card issued (6.4 transactions), leaning to infer that credit cards still remain the preferred instrument to perform e-commerce transactions.
Payment Cards Transactions
In Pakistan, payment cards can be categorized as Credit, Debit, Proprietary ATM, Social Welfare, and Pre-Paid Cards. As on end-June 2021, there were 45.9 million total cards in circulation. Collectively, these cards processed 708.7 million transactions amounting to Rs 8.4 trillion.
Credit Cards
As on end-June 2021, the number of reported Credit Cards in circulation is 1.7 million. These cards processed 47.4 million transactions of value Rs 270.1 billion during the year FY21. The total volume of Credit Card transactions has 76.2 per cent share on POS transactions and 23.1 per cent share in e-Commerce transactions whereas in terms of value, these transactions have 75.8 per cent share of usages on POS, 23.1 per cent share of usage for e-Commerce and the residual share of transactions pertains to ATMs.
The average transactions size of Credit Cards is Rs 5,699 (down from Rs 5,770 last year) whereas, on average, each credit card conducted 28 transactions (up from 25 transactions last year).
Debit Cards
The number of debit cards at the end of FY 2021 has been 29.8 million, observing a YOY growth of 11.8 per cent, whereas exhibiting annualized growth of 13.8 per cent during the last 4 years. It is point worthy to note that the number of debit cards increased mainly due to the mandate given by SBP to issue more secure Europay Master Visa (EMV) Chip and PIN Compliant cards, thus adding more security without compromising customer experience.
During the year under review, these debit cards processed 634.1 million transactions worth Rs 7.9 trillion, showing a YoY growth of 24.0 per cent by volume and 30.1 per cent by value of transactions. In the total volume of transactions processed by Debit Cards, ATMs transactions have 86.3 per cent share with a value share of 95.8 per cent whereas POS transactions have a 10.2 per cent share in volume and 3.4 per cent share in the value of transactions. The residual share of Debit Cards is contributed by e-Commerce transactions for online purchases of the Card Not Present (CNP) environment. The average transactions size by Debit Cards is Rs 12,395 whereas 21 transactions on average were processed by a single card.
Proprietary ATMs only Cards
Proprietary ATMs only cards are issued by 12 banks for cash withdrawals on ATMs. As on end-June 2021, there were 5.7 million ATMs only cards in circulation and these cards processed 25.1 million transactions worth Rs 278.1 billion.
These transactions showed a YoY decline of 45.3 per cent and 44.5 per cent by volume and value of transactions respectively, mainly due to the fact that the banks are in the continuous process of migrating their existing ATM-only card portfolio towards EMV Chip and PIN cards.
Social Welfare Cards
Social welfare cards are issued by the Government of Pakistan or provisional governments to support needy and disaster-affected people. As on end-June 2021, there were 8.4 million Social Welfare cards in circulation. During the year FY21, these cards processed 1.5 million transactions worth Rs 5.6 billion.
Prepaid Cards
Prepaid cards are being issued by a few banks in Pakistan in order to ensure that customers can enjoy flexibility while paying at merchant locations or online e-commerce portals. As on end-June 2021, there were 0.13 million cards in circulation. These cards processed 0.6 million transactions worth Rs 2.3 billion during the year FY21.
With the growth of digital access points, the associated risks are also evolving. SBP has been cognizant of the inherent risks in digital payments, therefore, it has been strengthening the oversight functions to ensure the security of digital payment systems and consumer protection.
