In Pakistan, the use of mobile banking has increased dramatically, with quarterly transaction volume surpassing Rs. 1 trillion for the first time.
This is due to the absence of bank fees and levies on the majority of services.
According to the State Bank of Pakistan (SBP), the number of mobile banking transactions rose by 147 percent to 44 million in the second quarter of 2020-21, worth Rs. 1.12 trillion (up 192 percent), compared to 17.8 million transactions worth Rs. 382.5 billion in the same quarter last year.
The number of registered cell phone banking users surpassed 9.4 million, representing a 5% growth.
Similarly, this quarter saw 22 million internet banking transactions worth Rs. 1.3 trillion, up from Rs. 1.1 trillion the previous quarter.
Last year, the banking regulator waived multiple fees on telephone and internet banking to limit consumer visits to bank branches as a COVID-19 preventive measure. The use of smartphones and online banking has exploded since then.
The fee waiver used to be brief, but the SBP has indefinitely exempted all charges from telephone and internet banking, including bill fees, IBFT, taxation, and so on.
A total of 44 million payment cards were issued in the world, with 27.6 million being debit cards and 1.7 million being credit cards.
Furthermore, banks distributed 7.6 million social security cards on behalf of BISP, EOBI, and other government agencies.
Card-based transactions on e-commerce websites have grown significantly, with 5.6 million transactions worth Rs. 15 billion processed by e-commerce retailers in the first quarter of the current fiscal year, up from 3.9 million worth Rs. 11.9 billion in the first quarter of the previous fiscal year.
Point of Sale
In response to SBP’s initiatives to promote the installation of Point of Sale machines to allow digital payments via debit or credit cards, the number of POS machines installed increased by 18% in Q2FY21, reaching 62,480 across the country.
During Q2FY21, 23 million transactions totaling Rs. 115 billion were processed on these POS machines, highlighting the positive effect of SBP’s market-friendly policies aimed at widening Pakistan’s payment acceptance infrastructure.
Overall, 296.7 million e-Banking transactions worth Rs. 21.4 trillion were completed in Q2FY21, representing a 24 percent increase in volume and a 22 percent increase in value over the same quarter last year.
This development was aided by the proliferation of digital payment infrastructure and the advent of new payment aggregators.
SBP will continue to promote digitization in the region, in line with its stated objectives to digitize payment and financial services, and expects the industry to support these efforts, which will increase convenience and financial inclusion for all Pakistanis.