Nowadays, all banks working in Pakistan are using VISA to settle their POS transactions executed in Pakistan locally, but while using VISA as a source of the settlement, there is a very major problem. The transactions are settled in dollars and the process of settlement is very tedious. The banks which settle transactions through VISA are maintaining Nostro accounts with JP Morgan and they have to bear additional costs. 

Due to this, the economy is overburdened because of unnecessary transactions of dollars and the dollar price rises. Moreover, JP Morgan is charging 0.13 percent against each transaction through dollars. Most transactions are local. 1-Link has provided a solution called “PayPak”. In PayPak, all transactions will be settled in local currency without bearing the extra cost. SBP will play the role of intermediary as the banks already have their reserves in SBP. It may become possible for PayPak to place all banks on one system of settlement without any hurdles. 

SOBIA IRSHAD, 

Karachi, November 4.