Payment transactions slip 3pc to Rs145.2trln in Jan-March

KARACHI: Pakistan’s total payment transactions fell 3 percent to Rs145.2 trillion in the third quarter of the current fiscal year in response to a nationwide lockdown imposed to contain the spread of COVID-19 pandemic, central bank data revealed on Tuesday.

The coronavirus pandemic has crippled economic activity, upended supply chains, and crushed demands for goods. The virus has forced both the consumers and the businesses to spend and invest less.

Payment transactions witnessed a decrease of 4.2 percent by volume, compared to the previous quarter, the State Bank of Pakistan (SBP) said in a Payment System Review for the third quarter of FY2020.

The volume of Pakistan Real Time Interbank Settlement Mechanism—a large value payment system—increased 2.9 percent to 0.7 million in January-March. However, the value of such transactions declined 2.0 percent to Rs95.1 trillion.

The SBP said overall use of digital channels had also seen a decline as e-banking transactions witnessed a decrease of 1.3 percent in volume and 0.9 percent in value.

“The decreases are primarily attributed to decreases in overall business volumes and values due to COVID-19 epidemic that has started since mid-March. 2020,” it said.

The e-banking channels such as real time online branches (RTOB), automated teller machine (ATM), point of sale, (POS), mobile phone, internet and call centers banking as well as e-commerce altogether processed 236.1 million transactions of value Rs17.5 trillion.

The number of paper-based transactions declined 7.1 percent to Rs32.6 trillion. The transactions processed through branch banking and paper-based instruments fell 10 percent to 109.3 million.

Despite the availability of other banking facilities on ATMs, still ATMs are mostly used for cash withdrawals in the country as this is evident from the transactions data which shows that in total ATMs transactions, cash withdrawals from ATMs has the highest share of 96.4 percent by volume and 91.2 percent by value. “The share of cash withdrawal has seen a slight increase from the previous quarter, which can also lead to build an inference on people’s dependence on cash withdrawals due to the prevailing pandemic condition,” the SBP’ report said.

During the quarter under review, ATMs processed 131.6 million transactions valuing Rs1.7 trillion.

However, the volume of POS transactions decreased to 19.5 million in the third quarter of FY2020 from 20.5 million in the previous quarter. These transactions stood at Rs102.5 billion in January-March FY2020, compared with Rs107.5 billion in the previous quarter.

“Further, it is expected that we will observe a further decline in transactions during the next quarter due to closure of markets and businesses during the lockdown period triggered by the COVID-19 pandemic,” the report said.