KARACHI - State Bank of Pakistan (SBP) Governor Ashraf Mahmood Wathra has said that secure and efficient payment systems are critical for effective functioning of the financial system and crucial for the provision of digital financial services. Inaugurating Pakistan’s first domestic payment scheme here on Tuesday, he said these services could be availed by using mobile phones, kiosk or other digital equipments.

“The new payment scheme, branded as ‘PayPak’, will compete in the domestic market with other international payment schemes,” he hoped. He clarified the new card would only be used within Pakistan, and will offer to ordinary citizens the benefits of low cost, affordability and security.

The governor informed the gathering that one of the strategic goals of SBP for the year 2020 was to transform the digital payments landscape by ensuring digital financial access to both the un-served and underserved population, while at the same time reducing the transaction cost and improving overall efficiency.

Appreciating the launch of the scheme, Wathra expressed the optimism that the initiative would not only provide affordable, safe, and efficient alternative to the existing banked population in the country, but will also offer low cost payment services to the unbanked citizens.

He hoped the launch would promote the usage of plastic card among consumers, merchants and banks in Pakistan. “Furthermore, start of the scheme will also help in reducing the outflow of the foreign exchange to international payment schemes as a part of fee payment,” he added.

The governor urged the country’s financial sector to take advantage of the current favourable market environment by investing in innovative technologies to expand the payment services and enhance access to the financial services.

He also asked the Pakistani banks to rapidly adopt the new payment scheme, and ensure that its benefits were transferred to ordinary citizens.

It may be recalled here that ‘PayPak’ has been introduced by 1Link, which is already providing interoperability services for ATM transactions as well as interbank fund transfers and utility bill payment facility.

With this launch, Pakistan has become 28th country in the world to have its own domestic payment scheme.

SBP Deputy Governor Saeed Ahmad congratulated the SBP governor, 1-Link and the banking industry on initiating the scheme.

Earlier, Javaad Khan, Partner of Mackenzie & Co, also appreciated the scheme and termed it need of the hour.