Branchless banking services expand with 16 new entrants in 1QFY24

January 01, 2024 (MLN): Sixteen banks and Microfinance Banks (MFBs) extended their offerings to Branchless Banking (BB) services in the first quarter of FY24, thereby expanding the accessibility of the financial services, the quarterly payment systems report for released by the State Bank of Pakistan (SBP) showed.

As of quarter-end of FY24, there were 33 Banks, 11 Microfinance Banks (MFBs), 4 Electronic Money Institutions (EMIs) and 5 Payment Service Providers/ System Operators (PSOs/PSPs) providing payment services across the country,

In addition, the report showed that the Real-time Gross Settlement System (RTGS) and Raast - an instant payment solution, both operated by SBP, further enrich country’s payments infrastructure.

Regarding digital platform users, there were 17 million mobile banking users, 10.3m internet banking users, 2.4m e-wallet holders (issued by EMIs) and 61.3m-wallet holders (issued by BB service providers) by the end of quarter.

Alongside this, there were 54.3m payment cards issued to the customers of which 79% were debit cards, 17% were social welfare cards and 4% were credit cards.

The share of digital payments in retail transactions of banking system increased to 80% during the quarter in comparison to 74% in the same quarter of last year.

While share of over-the-counter (OTC) transactions was 20% in retail transactions this quarter, its share by value was 87% indicating customers’ preference of OTC channel for higher value transactions.

In terms of volume, Large Value Payments (LVPs) settled by RTGS was 1.4m amounting to Rs199 trillion, whereas, retail transactions processed by banks, MFBs and EMIs during the quarter was 702m with value of almost Rs134tr.

Retail transactions mainly comprised of funds transfers (37%), cash withdrawals (36%), purchases at POS & e-commerce platforms (10%), bill payments & mobile top-ups (7%), cash/cheque deposits (7%), and 3% rest of the payments.

Funds transfers was the most prevailing transaction on digital channels by volume, while on OTC, cash/cheque deposits was the most prominent transaction mode.

All these retail transactions were facilitated by the payments network provided by the banks, MFBs and EMIs.

This included a network of 17,768 bank branches, 18,117 ATMs, 118,444 POS terminals and 7,310 registered e-commerce merchants (with banks/MFBs).

The quarterly payment systems report is released by the central bank, which highlights key advancements within the country's payment ecosystem and provides an inclusive overview of digital transactional activities.

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