ISLAMABAD, Nov 3 (Wealth Pakistan) – Pakistan’s retail payments landscape experienced a major shift in fiscal year 2024-25 as consumers and merchants rapidly moved away from card-based transactions toward wallets and account-to-account digital payments.
Digital wallets dominate e-commerce
According to the Annual Payment Systems Review FY2024-25 released by the State Bank of Pakistan (SBP), nearly 93 percent of all e-commerce payments were made through digital wallets and bank accounts, while only 7 percent used debit or credit cards. The trend highlights the growing preference for instant, low-cost payment channels integrated with mobile-banking applications.
Rapid growth in merchant acceptance
During the year, the number of point-of-sale (POS) terminals increased 56 percent to 195,849, while QR-enabled merchants exceeded 1.09 million. These channels together processed over one million transactions daily, valued at PKR 2.1 trillion — up 39 percent in volume and 37 percent in value from FY2023-24.
The SBP attributed this expansion to “soft POS” technology, which allows ordinary smartphones to accept payments without costly hardware. This innovation has helped thousands of small retailers, restaurants, and service vendors join the digital marketplace.
Cards lose share despite rising numbers
Although the number of active debit cards rose 9 percent to 53 million and credit cards grew 8 percent to 2.2 million, their share in overall digital spending declined further. Consumers are increasingly choosing QR-based and wallet payments because they offer instant settlement, fewer fees, and greater convenience.
The central bank said that its regulatory measures have encouraged banks and fintech firms to promote low-cost acceptance infrastructure, enabling a more inclusive digital ecosystem.
Merchants gain access to digital finance
The review also noted that merchant empowerment was a defining feature of FY2024-25. Digital payments, once confined to large retail chains, have now reached small community shops and roadside vendors. Faster settlement times and digital transaction histories have improved merchants’ access to formal credit channels.
More than 30 banks and Payment Service Providers (PSPs) participated in merchant-acquisition drives during the year, reflecting growing private-sector participation in the digital economy.
Economic impact and future outlook
Economists say the growing use of wallets and QR codes is delivering wider economic benefits. Reduced cash handling lowers theft risk and operational losses, while stronger record-keeping supports taxation and business formalisation.
At the same time, domestic payment systems are reducing reliance on imported card networks, saving foreign-exchange costs linked to international royalties.
The SBP expects the upward trend to continue in FY2025-26 as interoperability among wallet providers improves and merchants receive more incentives for digital acceptance. Pilot projects are under way to connect Raast person-to-merchant (P2M) transactions directly to merchant accounting systems, making settlements faster and simpler.
Officials said Pakistan is now on course to achieve full digital acceptance for retail commerce by 2028, a major milestone under the Digital Pakistan Vision.