Digital payments continue upward trajectory in FY21

KARACHI: The State Bank of Pakistan (SBP) on Friday released its Annual Payment Systems Review (PSR) for the fiscal year 2020/21, showing strong growth in the space of digital financial transactions in the country.

The central bank continued its pursuit for the development of a robust and efficient payments ecosystem in Pakistan.

According to the SBP, transactions processed through its large-value payments segment, known as Real-time Inter-Bank Settlement Mechanism (PRISM), recorded a YoY growth of 60 per cent in the number of transactions (volume) and 12.8 per cent in value.

Similarly, the overall e-banking transactions registered YoY growth of 31.1 per cent, which highlights a substantial increase in the adoption of digital means for payments.

This growth was spurred by major uptake in mobile banking (29 per cent increase in the number of users, 133.6 per cent and 178.7 per cent increase in volume and value, respectively,) and internet banking (32 per cent increase in the number of users, 65.1 per cent and 91.7 per cent increase in volume and value, respectively).

This promising growth was achieved on the back of 27 banks offering app-based banking along with other entities offering innovative payment solutions for accepting digital transactions.

During FY21, the digital payments adoption for retail transactions continued to show an upward trend. Due to the active efforts of the central bank, the number of cards accepting POS machines saw a growth of 47 per cent. Transactions processed through POS machines reached as high as 88.8 million, amounting to Rs453.1 billion, showing YoY growth of 26.3 per cent by volume and 24.4 per cent by the value of transactions.

The same trend was reflected in e-commerce transactions, as well. The number of e-commerce merchants reached 3,003, which shows a double-digit growth of 76 per cent.

Consumers carried out 21.9 million online transactions worth Rs60.6 billion on these locally-registered e-commerce merchants during FY21, which amounts to a significant YoY growth of 114.8 per cent and 74.1 per cent by volume and value of transactions, respectively.

These trends point towards healthy growth in fostering a more digitally integrated economy.

Similarly, on the card issuance side, as of end of June 2021, there were 45.9 million total cards in circulation that mainly comprised debit cards (65 per cent), social welfare cards (18.4 per cent), ATM only cards (12.6 per cent), credit cards (3.7 per cent), and prepaid cards (0.3 per cent).

Collectively, these cards processed 708.7 million transactions, amounting to Rs8.4 trillion during FY2021. The number of debit cards at the end of FY 2021 has been 29.8 million, observing a YoY growth of 11.8 per cent and annualised growth of 13.8 per cent during the last four years.

The transactions processed through ATMs also grew to 598.7 million with the total value of Rs8.1 trillion.

This amounts to the growth of 16.9 per cent by volume and 25.6 per cent by the value on YoY basis.

The country’s core payment systems infrastructure remained operationally resilient. All channels of payment systems showed significant growth. The SBP expects that going forward, the momentum of growth across all key areas of the digital payments ecosystem will continue to strengthen.

Modernising the country’s payment system and infrastructure is a key priority, for which the central bank will continue to work on providing an enabling regulatory environment.