LAHORE: Although Pakistan’s banking system is known to be riddled with draconian procedures which force customers to sign a multitude of forms, undergo lengthy procedures to make simple transactions, and wait weeks to receive a debit or credit card – recent manifestations propelled by the digital payments industry has resulted in the banking industry changing its paper-based processes to digital.
The State Bank of Pakistan (SBP) in its ‘Payment Systems Review’ for the financial year 2017-2018 has provided a statistical snapshot of the payment systems in the country, showing growth in various traditional and modern payment systems.
During the financial year 2018, the country’s core payment systems infrastructure remained operationally resilient. All the channels of payment systems showed significant growth compared to the previous year. The large-value payment system i.e. Pakistan Real Time Interbank Settlement Mechanism (PRISM) processed 1.7 million transactions amounting Rs361 trillion.
These transactions showed significant growth of 54.5 per cent and 29.2 per cent in both volume and value of transactions compared to the previous financial year. In these transactions, the transactions with regards to third-party customers’ transfers has the highest share of 1.3 million transactions (i.e. 79 per cent of the overall recorded transactions) whereas Government securities settlement transactions have the highest share of Rs256 trillion in value of transactions.
There were 1,094 locally registered e-Commerce Merchants having their merchant accounts in 8 banks as of end of June, 2018 showing limited boarding of e-Commerce merchants in the country. Consumers carried out 3.4 million online transactions of worth Rs18.7 billion on these locally registered e-Commerce Merchants during the year FY18.
These transactions showed a significant YoY growth of 183.3 per cent and 98.9 per cent compared to previous year. In addition to the above, domestically issued Debit, Credit and Pre-paid cards processed 6.8 million transactions of Rs. 39.7 billion on local and International e-Commerce merchants. In these e-Commerce transactions Credit Cards has the highest share both in volume and value of transactions.
While no specific information has been provided on the number of users of these cards, the number of transactions processed through these cards has increased by 37.3 per cent with total transactions, as on June 2018, having been reported at 34.4 million, at a value of Rs201.5 billion during the fiscal year 2018.
Having grown at a pace of 21.8 per cent and 23.4 per cent in the volume and value of transactions respectively, during the year under review, debit cards processed a total of 441.1 million transactions worth Rs5.1 trillion, far greater than the size and value of transactions conducted using credit cards.
However, the bulk of this usage has been on transactions concerning ATM withdrawals whereas the share of transactions with respect to Point of Sale usage has been merely 8.6 per cent in volume and 2.9 per cent in the value of transactions.
Credit cards, on the other hand has been the predominant medium for Point of Sale usage, with the 87.2 per cent of the total volume of credit card transactions being made on Point of Sale payments and 10.2 per cent in e-Commerce transactions.
