Friday April 12, 2024

Pakistan launches first instant payment system ‘Raast’

January 12, 2021

ISLAMABAD: Prime Minister Imran Khan on Monday launched the country’s first instant payment system—Raast—to enable end-to-end digital payments among individuals, businesses and government entities instantaneously.

Addressing the ceremony, the Prime Minister termed the launch a major step forward by the State Bank of Pakistan (SBP) towards “Digital Pakistan”, adding it would help include the low income groups and make them part of the mainstream economy. He was optimist that it would go a long way in fighting poverty, particularly in rural areas.

Raast is part of Prime Minister Khan’s “Digital Pakistan” vision to include poor segments of society in formal economy. The faster payment system will be used not only to settle small-value retail payments in real time but will also provide cheap and universal access to all players in the financial industry, including banks and fin-techs.

Khan said the instant payment system would not only document the economy, but would also generate more taxes to help build the country.He regretted that only two million people in the country of 220 million used to pay taxes, which was not enough to build hospitals and schools, and provide other basic facilities of life to the common man. Only 3,000 of the tax payers paid 70 per cent of the tax, he added.

The Prime Minister said foreign remittances had been constantly on the rise for the past five months, and had helped stabilise the rupee. After a gap of 17 years, the country’s current account had gone into surplus, lowering pressure on the rupee and playing a key role in strengthening the national economy, he added.

Khan said with increase in revenue collection, the government would create extra space for spending on the human development—education, health and clean drinking water.

He said Pakistan was among the top countries with the highest growth rate in the region, but today it was left behind. He hoped a move towards “Digital Pakistan” would help put the country back on track.

He said the people in Pakistan were used to cash economy, however, now it was time to move forward, adding the programme would help give a boost to the Ehsaas Programme, particularly its mobile wallet, and extend its reach to the women in rural areas.

Khan said his government was working for the empowerment of rural womenfolk by including them in various economic activities.He extended gratitude to Queen Maxima of the Netherlands as well as the Bill & Melinda Gates Foundation and the World Bank for the launch of the programme.

Queen Maxima appreciated Pakistan on the launch of the instant payment system as well as for effective strategy to deal with the Covid-19 pandemic, and the Ehsaas Programme for women empowerment.

Speaking on the occasion, SBP Governor Reza Baqir said the government employees and pensioners would be able to get payment of salaries and pensions in seconds. Baqir said it would also help curb corrupt practices and provide simple, secure and transparent transactions.

He said under the Prime Minister’s directions, the Roshan Pakistan system had met with success, adding the banks were also extending support to the people, who desired to take loans for building homes.

According to the data available with the SBP, digital payments account for only 0.2 per cent of Pakistan’s 100 billion transactions today, whereas the share of digital transactions in the peer countries ranges from 1.5 per cent to 7 per cent.

Raast is designed to operate at a cost recovery model to make digital payments affordable to end users of all socio-economic backgrounds. It will allow all financial institutions to seamlessly connect to each other via a single link to the central infrastructure, making digital payments accessible across any channel to customers of any financial institution.

Raast will also introduce more secure payment types to ensure that each transaction is authorised by the payer, and offer enhanced data protection and fraud detection services.