KARACHI: Amid spending a lot of time and money on e-banking, the value of paper-based transactions still outnumber digital transactions, showed a report by the State Bank of Pakistan (SBP) on Friday.

The SBP’s second quarterly report on payment systems for 2021-22 presented an encouraging picture of the adoption of digital banking in the country. However, it said the growth in e-banking transactions was much steeper relative to paper-based transactions, albeit the value of transactions was higher in the case of the latter.

The volume and value of paper-based transactions increased by 3.4 per cent and 12.2pc, respectively. While the volume of e-banking transactions is almost four times higher at 400 million than paper-based transactions at 101.4m, “the value of transactions of the former stands at Rs33.4 trillion compared with Rs41.6tr paper-based transactions”.

It shows that large payments are still being made through paper-based transactions, reflecting either the customers have low confidence in digital transactions or the problems emerging out of e-banking are barring them from using it for large payments.

E-banking includes transactions conducted via electronic channels, including real-time online branches, ATMs, mobile banking, internet banking, call centre banking, POS (point of sale) and e-commerce.

During the quarter under review, customers’ inclination towards the use of e-banking continued as it rose to 10.7pc in volume and 22.8pc in value of transactions on a quarter-on-quarter (QoQ) basis.

“All around growth in e-banking included expansion in both mobile and internet banking with a double-digit increase in value and volume of transactions during the second quarter,” said the SBP report.

The number of mobile banking transactions amounted to Rs94 million, while the value reached Rs2.2 trillion, which comes to 18.8pc and 35.4pc growth, respectively, on a QoQ basis.

Meanwhile, the number of mobile banking users grew by 5pc on a QoQ basis to 11.9m. Internet banking users reached 6.9m, conducting 33.8m transactions amounting to Rs2.4tr, which translates to a strong 13.9pc progress in terms of volume and a 28pc increase in value compared to the preceding quarter.

The retail sector also continued its upswing in the adoption of digital payments. During the quarter, a total of 31.4m transactions amounting to Rs178.1bn were processed via 92,153 POS terminals. This shows an impressive double-digit QoQ growth of 11.8pc by volume and 32.1pc by value.

Similarly, the number of e-commerce merchants also increased by 32.6pc to 3,968. These merchants processed 13.6m transactions worth Rs26.7bn, showing QoQ growth of 7.2pc by volume and 19.8pc by value.

As of December-end FY22, there were 5.4pc more cards than in the preceding quarter, reaching 48.6m cards in circulation which mainly comprised debit cards (63.5pc), social welfare cards (22.8pc), ATM-only cards (9.9pc), credit cards (3.6pc) and prepaid cards (0.3pc).

During this quarter, paper-based transactions showed relatively slower growth of 3.4pc in volume and 12.2pc in value on a QoQ basis. In the large-value (wholesale) payments segment, SBP’s Real-time Inter-Bank Settlement Mechanism processed 1.1m transactions amounting to Rs161.3tr, showing a QoQ growth of 5.9pc in volume and 1.4pc in value.

Published in Dawn, April 16th, 2022