Digital transactions continue to show robust growth in Jan-Mar

KARACHI: Electronic banking channels processed 309.5 million transactions of value Rs22.5 trillion during the third quarter of the current fiscal year of 2020/21, which showed double-digit growth over the same period last year, the central bank’s data showed on Monday.

Total transactions in volume and value stood at 236.1 million and Rs17.5 trillion, respectively, during the January-March of last fiscal year, according to the State Bank of Pakistan’s (SBP) quarterly payment system review.

In Q1, automated teller machines (ATMs) processed the majority chunk with 49% transactions in overall e-banking comprising real-time online branches (RTOBs), ATM, point of sale (POS), ecommerce, banking through mobile phone, and internet and call centers.

Value of mobile banking, internet banking and e-commerce transactions more than doubled during the third quarter of the current fiscal year compared with the same period a year earlier.

The number of internet and mobile banking users have also been increasing significantly, up 30.5 percent and 20.3 percent respectively during Q3FY21 over same period last year.

The volume of mobile banking transactions reached 51.7 million, (up 144 percent) valuing Rs1.3 trillion (up 178 percent) compared to 21.2 million transactions valuing 467.5 billion in the same quarter last year.

The number of registered mobile phone banking users reached 9.8 million showing an increase of 20 percent from the same period last year. Similarly, 24.5 million internet banking transactions valuing Rs1.5 trillion were recorded during this period compared to Rs0.75 trillion in the same quarter last year, registering a growth of 74 percent by volume and 109 percent by value.

In response to SBP’s measures to incentivize the installation of POS machines to facilitate digital payments through debit or credit cards in the country, the number of POS machines have shown a substantial growth of 37 percent when compared with the same period last year. On these POS machines, 25 million card-based transactions amounting to Rs124 billion were processed showing an increase of 28 percent by volume and 21 percent by value compared to the same quarter last year.

The increase in the number of POS machines this year can be attributed to the measures that SBP took early last year which included the reduction in interchange fee on debit card payments thus improving the share of acquirers from overall merchant discount rate.

Non-cash-based e-commerce transactions also increased substantially in the country during Q3FY21; ecommerce merchants processed 5.6 million transactions digitally amounting to Rs15.3 billion compared to 2.8 million transactions valuing Rs7.1 billion in Q3FY20, showing an increase of 100 percent by volume and 115 percent by value from the last year.

Total number of payment cards issued in the country stood at 44.5 million out of which 28.6 million are debit cards and 1.7 million are credit cards. Further, 6.4 million social welfare cards have been issued by banks.

“During the last few years, digital payment transactions in Pakistan have shown significant growth, reflecting the impact of favorable policies of SBP to incentivize customers,” said the SBP. “Expansion in digital payment infrastructure as well as emergence of new payment aggregators have also played their role in this growth. In line with its declared objectives to digitize payment and financial services, SBP will continue promoting digitization in the country and expects the industry to e reciprocate the efforts that will in turn increase convenience for people of Pakistan.”