According to the latest SBP’s Quarterly Payment System Review released on 4th June, 2018, digital channels have been fast replacing paper-based transactions of banks as Pakistan Real-Time Interbank Settlement Mechanism (PRISM) processed 446,500 transactions worth Rs.90.1 trillion showing a quarterly growth of 6.7 percent in terms of volume of transactions during January-March of FY18. All but 23 branches of banks in the country are now providing online banking services to their customers. Commercial banks deployed 426 more ATMs during the quarter, taking the country-wide total to 13,835: a 3.2 percent increase during the period. These ATMs processed 121.6 million transactions valuing at Rs.1.4 trillion during January-March, 2018, showing a quarterly growth of 5 percent and 7 percent in volume and value of transactions respectively as compared to the previous quarter. In total, ATMs transactions have the highest share of 95 percent in volume and 87 percent in value. In Pakistan, 26 banks are offering Internet Banking services and 8.4 million transactions worth Rs.332.8 billion were processed through this mode, showing a growth of 13.7 percent in value. Nineteen banks are providing mobile phone banking facilities to their customers with the number of registered phone users at 3.1 million. These users processed 5.9 million transactions worth Rs.112.8 billion, depicting a quarterly increase of 12.2 percent and 23 percent in volume and value, respectively. As on March 31, 2018, total number of payment cards reached 40.1 million including debit cards (21 million), credit cards (1.4 million), ATM only cards (8.5 million), prepaid cards (0.2 million) and social welfare cards (8.9 million). During January-March, 2018, 142.7 million transactions valuing at Rs.1.6 trillion were processed by these cards, of which the share of the debit cards was the highest at 85 percent in value. During the quarter ending March, 2018, 118.1 million transactions of the value of Rs.38.8 trillion were processed through branch-banking, paper-based instruments, depicting a decline of 3.7 percent in value compared to the preceding quarter.

The Payments System Review for July-March, 2018 clearly shows that banking through digital channels has been gaining increasing popularity in the country in the recent period and payments through these channels is now well above the traditional method of paper-based transactions. The change in preference has occurred mainly due to SBP’s supportive policies and the keenness of banks to expand and upgrade their infrastructure in line with the international standards. A number of conducive developments like higher growth rate, improved security conditions, higher literacy rate, publicity by banks and increase in the CPEC-related activities may have also helped to support the growth of digital banking in the country. Although all the stakeholders have played their part, the role of the SBP has been very crucial in promoting development of a modern and robust payment system without compromising financial stability. In cooperation with the internal stakeholders as well as the World Bank, it is now formulating a National Payment Systems Strategy and developing key payment infrastructure. It has also revised the PRISM Operating Rules to better align them with international standards. SBP also intends to work on a multi-pronged strategy such as Micro Payment Gateway (MPG) and Automated Clearing House (ACH) to promote digital financial services for both retail and wholesale payments. A Digital Transaction Account Scheme was approved in January, 2017, aiming to facilitate 2-minute account opening process and allow transactions with a basic/feature mobile phone from anywhere at any time. SBP has also designed a scheme for promotion of home remittances through Mobile Wallet to promote a swift and cost-effective way of receiving remittances from abroad. All these measures will promote financial inclusion which could help improve the saving rate in the economy. Besides, the strategy will reduce the load on conventional banking and the excess staff of the banks could be used for other productive purposes or reduced to cut expenditures of banks.