Raast payments witnesses spectacular growth in just 16 days
Pakistan's adoption of digital payment solutions is accelerating rapidly, with financial transactions via the Raast instant payment system reaching a staggering Rs1 trillion in just 16 days. This is a significant improvement compared to two years ago, when it took 336 days to reach the same milestone.
According to the State Bank of
Pakistan (SBP), Raast has processed 892 million transactions worth Rs20
trillion since its inception, with the most recent trillion transacted in
record time. The average payment size through Raast stands at Rs22,421.52. The
SBP highlighted that this growth reflects its commitment to making digital
payments accessible and convenient for everyone.
The surge in transactions is largely
driven by the Person-to-Person (P2P) module, launched in February 2022. The
SBP's 2023-24 Governor's Annual Report attributed the volumetric growth in
Raast payments to the success of this P2P module.
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Additionally, the introduction of
the Person-to-Merchant (P2M) module in Raast has expanded digital payment
options for businesses. This module allows payments via QR codes, Raast IDs,
bank account numbers, and request-to-pay options, further boosting the adoption
of digital transactions and enhancing convenience for businesses.
The total number of accounts in
Pakistan's financial system has also seen double-digit growth, increasing by
18% to reach 215 million by the end of FY24. The SBP emphasized that this
growth is crucial for raising financial inclusion in the country.
Supported by the expansion of
SBP-regulated entities such as banks, microfinance banks (MFBs), and
development financial institutions (DFIs), the branch network grew to 18,355 in
FY24, up from 17,751 in the previous year. This expansion, along with alternate
delivery channels (ADCs), facilitated financial intermediation, serving a
larger number of customers.
Despite high inflation and a
challenging economic environment, the banking sector's expanding branch network
is expected to enhance financial inclusion and outreach. Total deposits
mobilized by banks, DFIs, and MFBs increased by 21.6% in FY24, reaching
Rs33,236 billion, with savings and fixed deposits contributing significantly,
driven by an elevated interest rate environment.
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The report noted that this trend in
savings accounts bodes well for reducing cash dependency and improving the
country's savings rate, which remains low compared to regional peers. However,
rising taxation in the banking sector, accounting for 52% of pre-tax profits in
FY24, poses a concern for the sector’s ability to absorb macro-financial shocks
and sustain lending during periods of low economic growth.
While the banking sector showed a
robust 30.4% increase in after-tax profits, the asset base of Development
Finance Institutions (DFIs) contracted by 23.7% in FY24, and their after-tax
profits fell by 37% compared to FY23. Meanwhile, Microfinance Banks (MFBs)
faced slower asset growth at 8.6% in FY24, reflecting a challenging operating
environment.
Despite these challenges, the
overall financial sector saw steady growth, with the asset base expanding by
21.6% to Rs65.2 trillion by the end of FY24. However, financial depth—measured
as the ratio of financial sector assets to GDP—declined for the second
consecutive year due to persistently high inflation, hampering financial
intermediation efforts.
Source: Express Tribune