Branchless banking surges past one billion transactions in Q4, 2023

KARACHI: Pakistan’s branchless banking sector has shown a significant rise in the last quarter of 2023, with transactions surpassing the 1 billion mark for the first time, the State Bank of Pakistan (SBP) recent data show.

The quarter ending December 31, 2023, saw a total of 1,088.3 million transactions, valued at over Rs5 billion, marking a 12 percent increase in both volume and value compared to the previous year.

The SBP data showed that 22 percent of transactions were for bill payments and mobile top-ups, while an impressive 43 percent were for fund transfers.

Mobile Wallet transfers remain second in transaction value of Rs965 billion, followed by transfers from MWs to customers’ banking accounts that equate to Rs756 billion.With over 64.12 million active account holders and a total of 114 million registered accounts, more people are gaining access to digital financial tools.

During the quarter, the average transaction size was Rs4,646, higher than the same period last year. The SBP data showed that the average daily transactions soared by 12 percent year-on-year to 12 million compared to 10.8 million last year.

Region-wise, Punjab led the way with 71 million transactions, while Sindh and Khyber Pakhtunkhwa followed with 23.3 million and 14.7 million transactions, respectively. The gender disparity in account ownership remains, with males holding over 79.5 million accounts compared to females’ 35.1 million.

Analyst Malaika Tabassum at brokerage AlphaBetaCore said the achievement signals a shift towards digital finance and highlights the changing dynamics of financial management in Pakistan.

"The surge in utilization of mobile wallets signifies the growing preference for convenient and accessible financial services and reliance on digital finance solutions," Tabassum said. "To build on the momentum, we need to substantially improve the country’s digital infrastructure and ecosystem for the tech and knowledge economy, so it supports digital solutions, attracts institutional investments, resulting in industry-wide exponential efficiency and productivity impacts."

She advocated for enhanced smartphone penetration, affordable high-quality internet, and

expanded financial rails to further diminish the cash economy and promote a documented financial ecosystem.