Digital banking grows 12pc, paper based transactions down 10pc

A total of 905.9 million e-Banking transactions worth Rs65.9 trillion via automated teller machines (ATMs), internet and mobile banking, point of sale (POS) systems and other digital banking channels were processed in the country, growing 4.2 per cent in volume and 12.2pc Year-onYear (YoY), according to the data released by the State Bank of Pakistan (SBP).

On the other hand, 424.6 m transactions of worth Rs131.2 tn were carried out using paper-based instruments such as cheques, pay orders and demand drafts etc., recording a decline of 8.7pc in volume and 10.1pc in value as compared to last year.

In the annual Payment Systems Review for Fiscal Year 2019-20, the central bank noted that Pakistan had seen major improvements in the number of transactions through digital means, especially after the start of Covid19 lockdown period when the SBP waived all charges on digital fund transfers.

The State Bank underlined that significant progress has been observed in the usage of internet banking and mobile banking channels during the last few years, which is evident from the fact that in the last five year, the internet banking transactions have seen compound annualised growth of 31pc, whereas mobile banking transactions have grown by 86pc during the said period.

The overall volume and value of financial transactions in the country during FY2019-20 declined by 0.3pc and 1.9pc, respectively.

As of end June 2020, the total number of ATMs in the country were 15,612, up by 6pc from last year, accounting for approximately 7.5 ATM touchpoints for a population of 100,000, which is quite low when compared with other countries in the region, including 22 ATMs in India, 9 ATMs in Bangladesh, 14 ATMs in Nepal, and 88 ATMs in Iran per 100,000 population.

Furthermore, a turnover of 70.3 m POS transactions valuing Rs364.2 bn was recorded in FY20 as compared to 72.4 m transactions valuing Rs366.2 bn in FY19, showing a YoY decline of 2.9pc by volume and 0.5pc by value of transactions. The number of POS terminals also declined to 49,067 from 56,911 terminals last year. POS transactions have 7.8pc share in the total volume of transactions, with a value share of 0.6pc showing low uptake of merchant onboarding and insignificant usage of debit cards for retail transactions.