Digital payments now account for 87 per cent of retail transactions: SBP report

ISLAMABAD: Pakistan’s digital payment landscape has seen notable growth with digital channels now handling 87 per cent of retail payments by volume, highlighting a shift in consumer preferences and growing trust in digital transactions.

This was revealed in the State Bank of Pakistan’s (SBP) Quarterly Payment Systems Review for the first quarter of FY25.

Covering July to September 2024, the report outlined major developments in the country’s transition towards a cashless economy.

It showed strong adoption of digital payments and improvements in infrastructure, as Pakistan steadily moves away from cash-based transactions.

As a developing economy, Pakistan has made significant strides in modernising its payment systems, enhancing convenience and accessibility for individuals, businesses, and the government.

Retail payments in Q1 FY25 grew by 8 per cent in volume, with 1,951 million transactions amounting to Rs136 trillion.

Digital payments saw a quarterly rise of 9 per cent, both in volume and value, reaching 1,699 million transactions worth Rs36 trillion.

This surge in digital payments reflects increased public confidence in these channels. Of the total retail transactions 87 per cent were processed digitally, while the remaining 13 per cent were conducted over-the-counter (OTC).

In value terms, digital payments accounted for 27 per cent of the total, up from 24 per cent in Q4 FY24, amounting to Rs36 trillion. OTC channels handled Rs100 trillion, or 73 per cent of the total value.

Mobile banking apps have been a major driver of this growth, with 1,301 million transactions worth Rs19 trillion carried out through these platforms, marking an 11 per cent increase in volume and a 14 per cent rise in value.

The number of mobile banking app users also grew by 4 per cent to 96.5 million.

E-commerce continues to play a vital role in digital payments registering a 29 per cent increase in online transactions. Out of 118 million online payments, 91 per cent were made via digital wallets, indicating a move away from traditional card-based systems.

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