The State Bank of Pakistan, the nation’s central bank, has announced the development of a new national digital payment systems strategy that is aimed at promoting financial inclusion, especially for women.
Cash transactions dominate Pakistan’s $300+ billion economy, with most people receiving their salaries in paper money and local merchants mostly unable or unprepared to process digital transactions. Only 21% of Pakistani adults have an active bank account and of these merely 7% are women.
Due to such a low number of people using modern financial services, the SBP says that switching over to electronic or online payments will promote greater consumption and stimulate trade. This could help boost the nation’s economy by up to 7% and create around four million new jobs in the coming years.
SBP Governor Reza Baqir noted that Pakistan’s central bank aims to strengthen the nation’s legal and regulatory guidelines, so that it adheres to established international best practices. This will help lay the foundation for a “modern and robust digital payments network.”
Rules have been implemented for onboarding local merchants to digital platforms. Merchants will also be requested and encouraged to take mostly non-cash payments. Meanwhile, the SBP will be creating a significantly faster digital payments system.
The Pakistani government says it will gradually move towards accepting mostly electronic payments, and might launch a new platform that handles both collections and disbursements.
World Bank president David Malpass has praised Pakistan’s new digital transformation strategy. Malpass noted that various other stakeholders must join the SBP in order to promote the adoption of digital financial services.