KARACHI: The central bank has revealed a significant upswing in digital banking transactions during the second quarter (October-December) of the ongoing fiscal year, with the number of mobile app-based transactions surging 29 per cent to 280 million and internet banking transactions rising 15pc to 57m compared to the previous quarter.

The value of mobile banking transactions during the three months crossed the Rs11 trillion mark for the first time, amounting to Rs11.2tr, according to the State Bank’s latest quarterly “Payment Systems Review” published on Wednesday. The value of internet banking transactions jumped to Rs5.4tr.

The number of mobile and internet banking users jumped 8pc and 5pc to 16.3m and 10.8m, respectively, during the quarter compared to the preceding one.

The share of internet and mobile app-based transactions was higher than card-based transactions, the report said.

Number of transactions via Raast hits 107m, amounting to Rs2.3tr

According to the report, e-wallet transactions also exhibited a similar growth pattern, with a quarterly increase of 31pc by volume and 37pc by value.

Card-based transactions at ATMs, point-of-sale (POS), and e-commerce platforms also experienced notable growth during the quarter, totalling 235m (up 10pc), 65m (up 10pc), and 11m (up 13pc) transactions, respectively.

ATMs continued to be customers preferred channel for cash withdrawal with 229m transactions during the quarter compared to 49m through over-the-counter (OTC) channel.

Moreover, 82pc of retail transactions were conducted digitally during the October-December quarter compared to 80pc in July-September, showing a continued increase in adoption of digital payments.

Conversely, in terms of value, 85pc of retail payments were conducted at OTC and only 15pc through digital channels, the report said.

It noted that four major trends stood out during the current review.

First, there was consistent adoption of mobile app and internet banking, which was evident by the increasing number of users and transactions through these channels.

“Together, these two channels constitute the largest share of 50pc in total digital transactions,” the report said. This trend was expected to continue due to increasing adoption of Raast by these channels, it said.

The second trend was the increase in Raast usage. “In the current quarter, the volume of transactions processed via Raast reached 107m, amounting to more than Rs2tr, while since its inception in January 2021, Raast has processed a cumulative 343m transactions, with a cumulative value exceeding Rs7tr,” the report said. “This aggressive and continued build-up in the growth momentum of Raast shows that it is becoming a game-changer for digitising the payments ecosystem in the country,” it said.

Thirdly, e-wallets are gaining popularity, especially among the particular segments, such as youth and freelancers, with a total of 2.7m users.

“All these trends indicate a growing preference among Pakistanis for digital channels over traditional options, the report said.

For large value payments, the Real-time Gross Settlement System (RTGS) — called Pakistan Real-time Interbank Settlement Mechanism (PRISM), which is operated by the SBP — continued to facilitate settlements of interbank funds transfers, government securities and ancillary clearing services.

“During the quarter, RTGS processed 1.5m transactions amounting to Rs273tr, maintaining an exceptional availability rate of 99.99pc,” said the report.

The country has 44 banks and microfinance banks (MFBs) providing conventional and digital services through various channels, the report said.

“Among these, 31 banks/MFBs also provide mobile app-based banking, catering to a user base of 16m, while 32 banks/MFBs offer internet banking services with 11m users. Additionally, 16 banks have embraced branchless banking, serving 67m mobile app-based wallet users,” it said.

Published in Dawn, March 14th, 2024