SBP to launch QR code payments for Rs600 billion cattle trade on Eid-ul-Azha

By Our Correspondent
May 25, 2024
An undated image of a State Bank of Pakistan building in this undated image. — SBP/File

KARACHI: The State Bank of Pakistan (SBP) is introducing digital payments for cattle markets during Eid-ul-Azha, a move aimed at curbing cash transactions and promoting financial inclusion in a market estimated to be worth Rs550-600 billion during the festival.


The SBP is working with 25 banks to enable QR code payments at 50 major cattle markets nationwide, expanding the application of payments through Raast Instant Payment System, the central bank said a statement said.

"The initiative is being taken to help people and merchants to securely make payments, besides helping banks to potentially tap over Rs550-600 billion cattle purchases through digital banking on the annual religious festival."

Ahmed Sumair, joint director of SBP's Payment System Policy and Oversight Department, said the central bank is working with the banks to enable cattle markets and cattle farmers on QR code on the upcoming Eid-ul-Azha.

"We are working with 25 banks…and have selected 50 major cattle markets to enable QR code payment method ther," he said at the 17th international conference titled 'Mobile Commerce 2024'.

Sumair said the markets have been identified in all the 15 cities having SBP field offices including Karachi, Lahore, Islamabad, Rawalpindi, Faisalabad and Hyderabad.

"We are coving six cattle markets alone in Karachi on this Eid (falling in mid of June 2024)."The project is aimed at solving various pain points including the hassle of carrying cash and making payments to purchase sacrificial animals.

"Secondly, the project would help onboarding of cattle farmers and expand financial inclusion through Raast," he added.The SBP official said the QR code payment method would revolutionize the payment experience, as high cost of installing POS machines at merchants has its own limitations.

The QR payment has also enabled small merchants to receive payment through online transactions, discoursing the use of cash in the economy. Merchants may display a QR code to receive online payment in a real-time and hassle-free manner.

It is important to mention that reducing the high level of currency in circulation is one of the strategic objectives of the SBP; which can be achieved by enabling digital acceptance points, through QR codes, in every nook and corner of the country.

Yahya Khan, chief digital officer at Bank Alfalah Limited said the cash worth roughly Rs8-10 trillion is in circulation in Pakistan that is very high cash-to-GDP ratio and remained undocumented.

Unveiling the set of recommendations to be presented to Finance Minister Muhammad Aurangzeb soon, Khan, who also heads a banking committee, recommended to discontinue the Rs5,000 notes. "The central bank should replace the big denomination note with Rs1,000 notes through digital banking."

Nadeem Husain, coach, Planet N Group of Companies and Raqami Islamic Digital Bank, said banking in service and lending would remain key to success for the five digital banks in the making in Pakistan.

"However, they would face serious challenges like mobilizing deposits and maintaining cybersecurity to avoid rising fraud with banking customers."Muhammad Hamayun Sajjad, CEO, Mashreq Bank, said the low operating cost of digital banks due to no presence of physical branches would enable them to pay higher profit margins to depositors to mobile financing.