LAHORE  -  The transactions through paper-based instruments are declining in the country, as overall some 119 million transactions of worth Rs 37 trillion were carried out using paper-based instruments in July-Sep of FY18, showing a drop of 0.3 percent in volume of transactions and 8 percent in value of transactions.

According to the July-Sep quarterly report of the central bank of Pakistan, there are 44 banks with a total of 14,422 branches all over the country. Except 21, all bank branches in the country are providing real time online banking service. Digital channels or e-banking processed more than 172 million transactions worth over Rs.9 trillion during the quarter under review compared to previous quarter of April-June.

Banking experts stressed the need for moving away from a heavy reliance on cash for the modern and more developing economy

A study conducted by the Visa in collaboration with Roubini Thought Lab, pointed out that the use of cash is time-consuming, inefficient, and sometimes risky. The research, which covers around 100 cities of the world, stated that big cities around the world are increasing their adoption of digital payments. The study found that in Karachi, which was classified as a cash centric city, increased usage of digital payments, such as cards and mobile payments, could yield a net benefit of Rs 181.5 billion annually to the consumers, businesses as well as the government.

Visa Country Manager for Pakistan Kamil Khan observed that despite a relatively slower adoption of digital banking and payment services, the Pakistani market is on the right track of cashless economy. Quoting the SBP figure, which shows optimistic indicators, he said the consumers carried out 0.8 million online e-commerce transactions worth Rs4.8 billion through registered e-commerce merchants in the first quarter of 2018. This is a significant quarterly growth of 100.6 percent in volume and 50.5 percent in value of transactions respectively, he added.

“This shows that the country and people are ready to embrace digital technologies, as they are aware of the positive impact it can have to enable cross-sector socio-economic development. This positive impact was also viewed by Visa’s cashless cities study which found that over the next 15 years, Karachi could benefit from a 4.7 percent growth in employment and a 14.3 basis point increase in GDP by moving forward to an achievable level of cashlessness.”

Unlocking the true potential of a cashless economy, Kamil Khan claimed that cash is costly, as the businesses, on average, spend an equivalent of 2 percent of their monthly revenue accepting non-digital payments and 68 hours per week managing cash.  Visa Country Manager observed that ultimately, education is key.  He said that as the leading digital payments technology company in Pakistan, Visa is actively working with retailers and the wholesale markets to raise awareness on the advantages of digital payments.

 

“Our recently published study is just one of the several initiatives in our efforts to promote the usage of digital payments in Pakistan,” he added.

According to the research report, the business in Karachi can gain about Rs133 billion yearly in net benefits by going cashless. The consumers in Karachi will also greatly benefit from the shift to digital payments, achieving approximately Rs12.1 billion in time savings while conducting banking, retail and transit transactions, it added.