The State Bank of Pakistan (SBP) has issued a directive urging all regulated financial entities, including banks, microfinance institutions, and electronic money institutions, to ensure full integration of the Raast Person-to-Merchant (P2M) payment system by March 31, 2025. This initiative builds on the groundwork laid by the initial Raast P2M launch in 2023, as part of SBP’s broader strategy to digitize financial services in Pakistan.
Raast, Pakistan’s first instant payment system, was launched in phases, starting with bulk payments in 2021. The Person-to-Merchant (P2M) service, introduced in 2023, was aimed at providing businesses—both in-store and online—a seamless, real-time digital payment solution. However, the implementation faced delays due to the challenging macroeconomic environment, characterised by rising inflation, currency devaluation, and a general slowdown in economic activity​.
Many banks and Payment System Operators/Providers (PSOs/PSPs) faced delays in upgrading their systems to meet the integration requirements of Raast P2M. Given that Raast is a government-led initiative with stringent data security and real-time payment requirements, financial institutions needed time to build or upgrade their digital infrastructure for compliance​. That is one of the reasons why the recent notification is important because it reinforces compliance deadlines and reporting requirements for banks and other FIs.
The Raast P2M service is seen as a critical step in reducing cash dependency and expanding financial inclusion. By enabling merchants to accept digital payments, the system is expected to improve transactional efficiency, enhance tax documentation, and support the government’s goal of increasing the formalisation of the economy. Furthermore, it offers zero-cost transactions for users, making it a competitive alternative to traditional card-based payment systems​
SBP’s recent circular mandates that all existing account holders providing retail services must be enabled with Raast P2M, either directly or through partnerships with other payment service providers. Additionally, new merchants must have P2M services activated during the onboarding process. Failure to comply with these regulations may result in penalties under the Payment Systems & Electronic Fund Transfer Act 2007​.
