The State Bank of Pakistan (SBP), Thursday, informed that retail payments grew by 8% in Pakistan during the first quarter of fiscal year 2024-25 (Q1FY25) while payments through digital channels witnessed 9% quarterly growth. The SBP has released its Quarterly Payment Systems Review for Q1 FY 25, highlighting significant strides in Pakistan’s journey toward a cashless and digitally inclusive economy. The report, covering the period from July to September 2024, mentions robust growth in digital payment adoption, infrastructure development, and a gradual shift away from cash and paper-based instruments. The central bank maintained that the progress highlighted in the released review reflects the nation’s potential to transition toward a fully digital economy while fostering trust and reliability in financial services. The SBP sharing highlights of the report, through a statement issued here, stated that retail payments in Pakistan during Q1 FY25 grew by 8% in volume to 1,951 million with value of PKR 136 trillion. Payments through digital channels witnessed a quarterly growth of 9% by both volume and value reaching to 1,699 million amounting to PKR 36 trillion. “Digital channels are now handling 87% of retail payments by volume, showcasing the public growing trust in digital payments. Mobile banking apps provided by Banks, MFBs, BBs and EMIs played a pivotal role in this growth, with 1,301 million transactions amounting to PKR 19 trillion being carried out through these apps during the quarter, reflecting a 11% rise in volume and 14% in value,” the SBP report mentioned . The collective number of mobile banking app users grew by 4%, reaching 96.5 million from 93.0 million in previous quarter, it added. The quarterly review stated that E-commerce is also emerging as an integral component of Pakistan’s digital payments, with a 29% increase in online e-commerce payments. Of the 118 million online e-commerce payments during the quarter, 91% were conducted through digital wallets, signifying a shift from traditional card-based systems. Complementing this growth, the review highlighted that the number of Point-of-Sale (POS) terminals expanded to 132,224, enabling 83 million transactions worth PKR 429 billion. Furthermore, the ATM network grew to 19,170 units, facilitating 243 million transactions worth PKR 3.9 trillion, maintaining its key role as a cash withdrawal channel. The central bank appreciated role of branchless banking agents in efforts to include under-served segments and extending financial services especially in rural and remote areas and informed that over 693,178 agents processed 28 million bill payments/mobile top-ups and 75 million cash deposit and withdrawal transactions during the quarter. Retail merchants accepting digital payments witnessed a 16% growth, due to expanded services of payments through mobile wallets, QR codes, and other digital tools, the review stated and remarked the developments underscore the importance of alternative financial channels in bridging economic disparities across regions. The report also highlights the success of the Raast instant payment system, which processed 197 million transactions worth PKR 4.7 trillion, further enhancing the efficiency of instant payments for individuals and businesses alike. Pakistan’s payment ecosystem continues to thrive due to the combined efforts of banks, fintechs, payment service providers, and regulators, and this collaborative approach has fostered innovation, accessibility, and a greater sense of financial inclusion across the country, the SBP Review noted and reiterated its commitment to driving a sustainable and inclusive financial future, ensuring that digital innovation continues to empower individuals and businesses.