By Farooq Awan

Fund transfers remained the largest component of Pakistan’s retail payment system during the second quarter of fiscal year 2025-26, with transactions amounting to Rs121 trillion and accounting for the majority share in overall payment activity. According to the Payment Systems Quarterly Review for Q2 FY26, available with Wealth Pakistan, a total of 1.6 billion fund transfer transactions were recorded during the quarter.

These transactions represented 47% of total retail payments by volume and 72% by value, highlighting their central role in the country’s financial system. The report shows that fund transfers are carried out through both digital channels and over-the-counter (OTC) services. However, the overwhelming majority of these transactions were processed digitally.

Around 96% of fund transfer transactions were conducted through digital platforms, while only 4% were carried out through bank branches and agent networks. In value terms, the share of fund transfers conducted through digital channels also increased during the quarter. The proportion of digital transfers by value rose from 34% in the previous quarter to 40%, indicating a growing reliance on electronic platforms for high-value transactions.

Fund transfers include a wide range of financial activities, such as intra-bank and inter-bank transfers, payments to individuals and businesses, and transactions initiated through mobile banking apps, internet banking portals, and branchless banking services. These transfers are used for both personal and commercial purposes across different segments of the economy. The report indicates that the growth in fund transfer transactions is closely linked to the expansion of digital payment channels.

Mobile banking applications, in particular, have played a significant role in facilitating transfers between accounts, allowing users to send and receive funds instantly. Branchless banking services have also contributed to the volume of fund transfers by extending financial services to areas with limited access to traditional banking infrastructure.

These services enable customers to carry out transactions through agent networks and digital applications. Despite the dominance of digital channels, OTC transactions continue to be used for certain types of fund transfers, particularly when users prefer physical interaction or digital access is limited. Bank branches and agents provide services such as cash-based transfers and assisted transactions.

The data shows that fund transfers remain a key driver of overall payment activity in Pakistan, in both volume and value. Their large share within retail payments reflects their importance in facilitating financial flows across individuals, businesses, and institutions. Overall, the quarterly figures highlight the continued expansion of fund transfer activity, supported by the growing use of digital platforms and the availability of multiple channels for conducting transactions.

Credit: INP-WealthPk