State Bank logs significant growth in digital payment transactions in Q1

KARACHI: Digital payment transactions have increased significantly during the first quarter of the current fiscal year due to growing tendency of consumers toward cash substitute amid social distancing norm, the central bank’s said on Thursday.

“Growth in digital payment infrastructure as well as emergence of new payment aggregators have also been a contributing factor in this growth,” the State Bank of Pakistan said. “Moreover, it also reflects the changes in consumer’s preference for digital transactions amid COVID-19 situation.”

In July-September, 253.7 million e-banking transactions were conducted by customers valuing Rs19 trillion. E-banking transactions comprise real-time online branches transactions, ATM transactions, internet banking transactions, mobile phone banking transactions, e-commerce, point-of-sale, and call center banking, according to the SBP’s quarterly payment system review.

This shows strong growth in the pace of digital financial transactions in the country, said the SBP.

Although real-time online branches transactions have a major share of e-banking transactions in terms of value, about 80 percent, other types of transactions are more than 83 percent of the e-banking transactions in terms of volume.

During Q1FY2021, the most promising uptake was seen in internet banking and mobile banking transactions as the number of registered mobile phone banking users reached 8.9 million showing an increase of 41 percent over Q1-FY20 and the number of internet users touched 4.3 million with a growth of 26 percent over the same period. Accordingly, the mobile banking transactions increased to 36.4 million amounting to Rs908.7 billion, marking an increase of 139 percent by volume and 211 percent by value when compared with the same period last year. Similarly, internet banking transactions increased to 18.9 million, valuing Rs1.1 trillion during Q1-FY21, registering a growth of 55 percent in volume and 89 percent in value, in comparison to the same period last year.

Another major avenue of e-banking transactions is through point of sale, whereby people make transactions using credit or debit cards typically for shopping at markets.

The number of transactions through point-of-sale machines that declined sharply during Q3 and Q4 of FY2020, owing to the closure of markets amid COVID-19, recovered significantly in Q1-FY21. The number of transactions through point-of-sale were recorded at 16.8 million amounting to Rs92.3 billion, showing an increase of 47 percent in terms of volume and 49 percent in value. Card-based transactions on e-commerce portals also followed a similar trend – a fall during Q3 and Q4 of FY20 due to COVID-19 related decline in economic activity, and a recovery in Q1FY2021. Such transactions were recorded at 3.9 million, amounting to Rs11.9 billion in Q1-FY21, exhibiting strong growth of 70 percent by volume and 27 percent by value, when compared with the Q4-FY2020.

Nevertheless, a strong growth in e-commerce transactions can also be witnessed as the number of transactions and their value grew by 77 percent and 47 percent year-on-year.