The ongoing digital payment spurt

Ever since the pandemic gripped the world and disrupted everything, Pakistan’s payments industry has seen a rapid shift towards digitisation, led by exponential growth in mobile banking. In fact, 80 per cent of all banking transactions (excluding branchless banking) are digital already, while only 20pc remain over-the-counter and continue to become a smaller part of the pie. On top of it, the new electronic money institutions (EMI) have now reached a meaningful scale, doing over Rs200 billion in the last fiscal year. Since then, that growth has continued, as the State Bank’s (SBP) latest Payment Systems Review for Q1-FY24 shows. Overall, the e-banking transactions through banks, microfinance banks and EMIs clocked in at 561 million, as against 141.3m done over the counter. This doesn’t include branchless, where the quantum is far bigger, with volumes of 878.9m in the first quarter. However, in terms of value, the dominance of paper was visible with a throughput of Rs17 trillion, up from Rs15.8tr.