Pakistan announces subsidy scheme to push QR payments

Pakistan has approved a PKR 3.5 billion subsidy to incentivize Person-to-Merchant (P2M) digital payments as the government looks to accelerate the country’s transition to a cashless economy.

The subsidy will fund the cost of these payments to bring more merchants on Raast, the country’s premium digital instant payment platform.

The funding has been approved under the Prime Minister’s Cashless Economy Initiative, which targets banks, microfinance banks (MFBs), electronic money institutions (EMIs), and payment service operators/providers (PSOs/PSPs).

Pakistan has made significant strides in the mass adoption of digital payments. In the third quarter of FY25 (January-March), Raast processed 371 million transactions totaling over PKR 8.5 trillion. However, person-to-merchant (P2M) — a person paying a business entity — payments were a mere blip with only 1.5 million transactions amounting to PKR 4.5 billion. Meanwhile, person-to-person transactions — one person sending money into another person’s account — stood at 368 million, amounting to over PKR 8.01 trillion.

Now, the government is planning to incentivize more merchants to adopt the Raast P2M payment system. Under the new subsidy plan, the government will pay 0.5% of the value of every successful QR-based transaction or PKR 100 per transaction, whichever is lower.

This subsidy will be shared equally between merchants and customers’ financial institutions. It will apply to all Raast QR-based merchant transactions conducted between September 1 and June 30, 2026.

Additionally, service providers may charge up to 0.25% of the transaction value for onboarding and servicing merchants. Quarterly claims for the subsidy will be submitted by regulated entities to Raast Payments Pakistan, verified by their internal audit teams.

RPP will reconcile the claims with system data and coordinate any discrepancies. If total claims exceed the PKR 3.5 billion annual limit, the government will reduce the per-transaction subsidy to remain within budget, while ensuring equal allocation across entities.

Only successful transactions recorded in the Raast system will qualify for the subsidy, with the Finance Division releasing the subsidy funds following internal sanctioning procedures.

All participating financial institutions have been directed to comply with the prescribed process and maintain complete documentation for audit and verification.