Digital payments surge as Pakistan's financial sector evolves

Pakistan’s financial sector is undergoing rapid transformation, with digital payments hitting new milestones, according to the State Bank of Pakistan’s Payment Systems Quarterly Review for the first quarter of fiscal year 2024-2025 (FY25).

The report, which covers July to September this year, revealed an 8% increase in retail payment volumes, which reached 1.95 billion transactions valued at PKR 136 trillion.

Digital transactions dominated with 1.7 billion transactions — 87% of the total retail payments by volume — signaling the country’s growing shift toward a cashless and digitally inclusive economy.

Mobile banking apps were the primary driver of growth, accounting for 77% of all digital transactions by volume. Transactions through these apps rose 11% in volume and 14% in value, reaching 1.3 billion, and were worth PKR 19 trillion. The number of registered users on mobile banking apps grew to 96.5 million, up 4% from 93 million in the previous quarter.

The surge reflects increasing public trust in digital payment systems as Pakistan embraces a more technologically integrated financial landscape.

Pakistan’s e-commerce payments surged 29% during the first quarter of FY25, with digital wallets driving the growth, the State Bank of Pakistan reported. Wallet-based payments accounted for 91% of the 118 million transactions conducted through digital wallets.

Internet banking users grew by 3%, reaching 12.4 million. The platform processed 60 million transactions worth PKR 7.5 trillion, representing 4% of digital payments by volume and 21% by value, underscoring its role in higher-value transactions.

The number of point-of-sale terminals rose to 132,224, facilitating 83 million transactions valued at PKR 429 billion. Meanwhile, ATM usage declined slightly, with a 0.6% drop in transaction volume. The country’s 19,170 ATMs processed 244 million transactions worth PKR 3.9 trillion, averaging 138 transactions per machine per day.

Branchless banking agents played a critical role in expanding financial services to underserved areas. They processed 28 million bill payments and mobile top-ups, along with 75 million cash deposit and withdrawal transactions during the quarter.

Digital adoption among retail merchants rose 16%, driven by increased use of mobile wallets and QR code payments. These advancements in digital finance continue to narrow regional economic disparities and highlight Pakistan’s progress toward a more inclusive financial system.

Raast's progress

Pakistan’s instant payment system, Raast, achieved a significant milestone in FY25's first quarter, processing 848 million transactions since its launch in 2022, the State Bank of Pakistan reported. This marks a 17% growth in both volume and value.

During 1QFY25, Raast handled 197 million transactions worth PKR 4.7 trillion, growing 17% from the previous quarter. Daily transactions reached 3 million, highlighting the system’s increasing popularity and efficiency in reshaping the nation’s financial infrastructure.

The central bank reaffirmed its commitment to fostering a sustainable and inclusive financial ecosystem, emphasizing collaborative efforts among banks, fintechs, and payment service providers. These partnerships have driven innovation and expanded accessibility, making digital payments a cornerstone of Pakistan’s economy.