Pakistan’s heavily cash-reliant economy, which faces significant structural challenges including a low tax-to-GDP ratio (around 9 to 10 percent), is seeing a rapid shift towards digital financial services aimed at enhancing economic documentation and transparency.
Ahmed Ali Siddiqui, Group Head of Consumer Finance and Digital Banking at Meezan Bank, today termed this shift a “economic necessity” rather than just a technological change. He said that digital transformation offers a major opportunity to foster inclusive growth by supporting transparency, promoting a documented economy, and helping businesses transition from informal cash operations to the formal economic sector.
As the country’s financial landscape undergoes a major transformation, digital payment transactions are seeing a rapid increase. Data from the State Bank of Pakistan indicates that approximately 92 percent of retail transactions are now conducted through digital channels, signaling a significant decline in cash dependency.
In this evolving environment, Meezan Bank has become a key institution in merchant acquiring and facilitating digital payments. According to industry estimates, the financial institution’s merchant base has exceeded 50,000, processing transactions worth approximately Rs 50 billion monthly.
Experts say that digital payments can play a crucial role in addressing long-standing economic issues. Small and medium-sized enterprises (SMEs) contribute around 40 percent to the national GDP but receive less than 10 percent of formal bank loans. Furthermore, industry sources estimate that the cost of handling cash alone is 0.5% to 1.5% of the GDP.
To tackle this issue, Meezan Bank has expanded its digital acquiring infrastructure, which includes point-of-sale (POS) terminals, QR-based payments, and e-commerce solutions. The bank is also leveraging the Raast instant payment system to provide fast, low-cost, and secure transactions for both retailers and consumers.
As part of its expansion strategy, the bank plans to onboard more than 140,000 new merchants and integrate the Raast system on over 40,000 POS terminals. Innovations like instant QR code generation and soundbox devices, which give merchants real-time audio alerts for transactions, have been introduced to enhance trust in electronic payments.
Market data shows a significant increase in Raast-based merchant payments, with transaction volumes seeing an average monthly growth of 40 percent. Mr. Siddiqui emphasized that continuous investment in infrastructure and innovation is essential to maintain this momentum. He affirmed that the bank’s focus is on building a robust, secure, and Shariah-compliant digital ecosystem that contributes to the national goal of a cashless economy.
According to financial experts, as more institutions expand digital payment facilities and join the merchant network, financial inclusion and economic documentation in Pakistan will accelerate, paving the way for further expansion and stability in the country’s digital payment system.