The State Bank of Pakistan’s annual payment systems review for the fiscal year 2022-23 highlights a significant transformation in the country’s banking landscape, showing a surge in digital transactions, and reflecting a growing preference among consumers for mobile and internet banking channels. The report reveals that mobile and internet banking transactions experienced remarkable growth, with a 57% increase in volume and an 81% increase in value. This indicates a clear shift towards digital banking solutions among consumers, driven by convenience and accessibility.
E-banking transactions through banks and microfinance banks (MFBs) also showed substantial growth, with a 29% increase in volume and a 21% increase in value during the fiscal year. Similarly, branchless banking (BBs) transactions witnessed notable expansion, with transaction numbers rising by 28% and transaction values increasing by 45% during FY23.

One of the standout trends in the report is the remarkable increase in the number of e-banking users. Internet banking users increased by 15%, mobile banking users by 30%, and BB mobile app users by 42%. Electronic money institutions (EMIs) played a significant role in this growth by opening more than two million e-wallets since their inception.
This surge in e-banking can be attributed to its efficient and instant payment solutions, which have been steadily gaining popularity over the years. In contrast, paper-based transactions experienced a decline of over 4% during FY23 and a cumulative decrease of approximately 20% over the past five years. However, the value of paper-based transactions increased by 20% in FY23. The report also highlights the crucial role played by the Real-Time Gross Settlement (RTGS) system and Raast – Pakistan’s Instant Payment System, both owned and operated by SBP. RTGS processed 4.9 million transactions totalling Rs640.4 trillion during the fiscal year, while Raast processed 155 million transactions totalling Rs3.2 trillion.

Financial institutions in Pakistan are actively enhancing their e-banking infrastructure to meet customer needs. This includes expanding the number of Point-of-Sale (POS) terminals, Automated Teller Machines (ATMs), Cash/Cheque Deposit Machines (CDMs), and e-commerce merchant networks. As of June 30, 2023, Pakistan had 115,288 POS terminals, 17,808 ATMs, 520 CDMs, and 6,889 e-commerce merchants. During the fiscal year, the number of transactions through POS terminals and ATMs grew by 45% and 17%, respectively. Domestic e-commerce transactions using payment cards reached 31.8 million, amounting to Rs142 billion in value. As of June 30, 2023, 58.1 million payment cards were in circulation, issued by various institutions, further solidifying the country’s transition towards a digital payment ecosystem.

Talking to WealthPK, Asim Mustafa, Regional Head at Faysal Bank, said, “These findings from the SBP’s annual review underscore a significant shift in Pakistan’s banking landscape toward digitalisation. The substantial growth in mobile and internet banking transactions, along with the increased adoption of electronic payment instruments, is indicative of changing consumer behaviour and evolving preferences.” He said one of the key takeaways from this report was the acceleration of digital transformation in the banking sector. “The double-digit growth in mobile banking users, internet banking users, and the issuance of e-wallets by EMIs is a clear testament to the convenience and accessibility offered by digital banking channels.”

Mustafa further said that the decline in paper-based transactions, coupled with the simultaneous increase in the value of such transactions, suggests that while traditional methods aren’t disappearing entirely, their usage is evolving toward higher-value transactions. “This could be attributed to businesses and individuals adopting digital payment solutions for smaller, everyday transactions.” “The role of the RTGS system and Raast in facilitating transactions cannot be overstated. The sheer volume and value of transactions processed through these systems demonstrate their critical role in Pakistan’s financial infrastructure. Their continued reliability and efficiency will be essential to support the growing demand for digital transactions,” he explained.

Lastly, the regional head of Faysal Bank said the expansion of POS terminals, ATMs and e-commerce merchant networks was a promising sign for financial inclusion and accessibility. “These infrastructure developments not only serve urban areas but also extend financial services to more remote regions, contributing to economic growth and financial empowerment,” he said.

Credit: Independent News Pakistan (INP)