Going cashless?

With a little over seven months left, what is the probability that a task that has been completed 35 per cent so far will meet its deadline? This is a big question from the prime minister’s team that has planned to link at least two million retailers with any digital mode. In a meeting held earlier this week, the PM said the ongoing initiatives to transform the country into a cashless economy will play a vital role in ensuring sustainable development. The facts say something else. So far, only 700,000 retailers have started using any form of digital payments. Of these, a meagre 39,000 are in Islamabad. This slow progress cannot be blamed on the resistance put up by retailers, who are generally not welcoming to change. Understanding the root cause of this performance will be essential, especially when the PM has other similar projects in the pipeline. For example, the authorities have also announced plans to launch 10 million digital wallets to transfer Benazir Income Support Programme (BISP) payments (set to become operational by the end of this month). This is a great initiative and will play a vital role in ensuring that the deserving beneficiaries receive their payment in full.

That this could be done before Ramazan (to fall in February 2026) is also commendable since the usual display of long lines of beneficiaries waiting for collection could be done away with. But what is missing from these announcements is the acknowledgement of the challenges that the government faces. A digital economy stands on a coherent internet infrastructure. In Pakistan, the less said about the internet situation, the better. The country ranks seventh in South Asia in the Internet Resilience Index, ahead of only Iran and Afghanistan, with low scores in infrastructure (34) and performance (31) and 79th globally in the Inclusive Internet Index, with deteriorating internet quality, according to a report by the Sustainable Development Policy Institute. Average speeds dropped 40 per cent in 2024, with Pakistan now among the lowest 12 per cent globally for mobile and broadband speeds, trailing behind war-torn Palestine and Libya. Despite consuming over 25,000 petabytes of data, internet access remains at just 32.9 per cent.

These numbers are not viable for a digital economy. Every other day, there is an internet outage with payments stuck as apps barely load. On top of this, ongoing financial scams where people are emotionally manipulated to transfer money have also made people wary of adopting digital payments. Most officials working in this area are aware of this and acknowledge that Pakistan’s journey in this regard will be longer than expected and riddled with challenges. The dream of a digital economy will remain unfulfilled unless Pakistan has a smooth and fast internet and a mechanism to deal with financial fraud. Until then, people’s trust in cash will reign supreme.