LAHORE: Pakistanis made 13.2 billion digital payments in the last financial year, two-thirds more than the year before. The State Bank of Pakistan (SBP) says digital channels now carry 92% of all retail payments that pass through the banking system. For a country long described as a cash economy, that is a remarkable change in a short time.
The figures come from the central bank’s Annual Payment Systems Review for 2025-26, released on October 6.
Retail payments through formal channels reached 14.3 billion transactions worth Rs673 trillion. The count rose 58% in a year and the value 10%. Digital channels had an 88% share a year earlier and 85% the year before that.
The mobile phone did most of the work. Phone-based payments crossed 11.1 billion, a rise of 79%. Internet banking handled 0.3 billion, up 15%.
More people now have the tools. Users of branchless banking apps, the wallets most Pakistanis know, reached 99.1 million. Users of banks’ own mobile apps reached 30.4 million.
Shops are catching up as well. There are 337,791 card machines at 295,367 merchant locations, and they handle nearly 1.5 million card payments a day, against one million a year ago. Payments to merchants from bank accounts and wallets grew 141%, far faster than the 47% growth in card payments. In online shopping, 96% of payments made through banks came straight from accounts.
Behind the apps, the plumbing has been rebuilt. In August 2025 the SBP launched PRISM+, an upgrade of the system banks use to settle large payments with one another. It runs on ISO 20022, the international messaging standard. With Raast, the instant payment system for the public, already on the same standard, the SBP says Pakistan has joined the group of countries whose wholesale and retail systems both use it.
This matters for business. A payment system that speaks the same language as the rest of the world makes it easier for foreign banks, investors and exporters to deal with Pakistan.
The SBP credits policy measures, better digital infrastructure and efforts by the industry. It says it remains committed to payment systems that are secure, efficient and inclusive, and to protecting public trust and stability.
It is also frank about what is left to do. Digital channels carried Rs257 trillion of the Rs673 trillion total, which is 38% by value. Big payments still move mostly by cheque, over the counter and in cash. The central bank says there is considerable room to shift high-value payments by businesses, government bodies and financial institutions. The review also counts only payments inside the formal system. Cash that never touches a bank is outside it.
Prime Minister Shehbaz Sharif has made a cashless economy one of his government’s stated goals. At a review meeting in July he said the shift would bring sustainable growth and more transparency. His office said merchants taking QR payments had risen 300% in a year to two million, and that all 10 million beneficiaries of the Benazir Income Support Programme (BISP) are now paid through digital wallets.
He also ordered that remittances from abroad be made fully digital. An independent assessment of the cashless drive is due in November.
Bankers see the next stage clearly. Muhammad Hamayun Sajjad, chief executive of Mashreq Pakistan, said last month that the focus now has to move “from access to adoption”.
Traders are more guarded. Muddasir Masood Chaudhry of the Pakistan Industrial and Traders Association Front said last year that the government was moving fast, but traders on the ground were struggling with practical problems. A trader in Lahore’s Shah Alam Market, Rizwan Sheikh, said that his customers rarely ask to pay digitally. “Cash is quick and trusted,” he said.
Tax is the unspoken issue. Tax expert Arsalan Qureshi said most traders feel that going digital only exposes them to the tax authorities without giving them anything in return. A small study published this year in a National School of Public Policy journal found the same pattern among informal workers that the more they feared being watched by the state, the less they used Raast.
There is another side to that story. The Federal Board of Revenue’s point-of-sale network now covers 17,300 retailers, and it has reported that restaurants paid almost four times as much sales tax after they joined. Honest businesses gain when their competitors can no longer hide sales.
Shoppers are split by age. A survey of big stores in Karachi late last year found that 30 to 40% of customers paid by card or through a bank. Younger people preferred QR codes and cards, while those over 50 mostly stuck to cash. Some said carrying cash felt risky because of crime.
For households, the gains are practical. Sending money to family is instant and free on Raast. Bills and school fees can be paid from home. Government stipends now arrive in a digital wallet. Freelancers, who brought in a record amount of foreign exchange last year, depend on these channels to be paid.
The limits are just as real. About 61% of Pakistanis have access to mobile broadband, and coverage in many rural areas is patchy. A person without a smartphone, a signal or the confidence to use an app is not part of this change yet.
Pakistan has done the hard part first. It has built a modern system and persuaded tens of millions of people to use it for small, daily payments. The job now is to bring in the shopkeeper, the wholesaler and the government office, where the large sums are. If that happens, more of the economy will be on the record, tax will be shared more fairly, and small businesses with a payment history will find it easier to borrow.
The November report on the cashless drive will show how close that is.
Leave a Reply