KARACHI: Pakistan on Friday launched the National Payments System Strategy (NPSS) to boost its economic growth by seven percent, create four million jobs and attract $263 billion of new deposits by 2025, officials said.
State Bank of Pakistan Governor Dr. Reza Baqir and World Bank President David Malpass launched the NPSS in Karachi, targeting one million new Point of Sales (PoS) as part of the country’s plan to digitize its economy and achieve greater financial inclusion.
“The State Bank will continue to strengthen legal and regulatory framework [of the country] to bring it in line with the best international practices. Our main focus will be to digitize retail payments and introduce new digital instruments in the country. We would like to give the challenging target of digitizing a million new merchant locations within the next three years,” Dr. Baqir said at the launching ceremony of the NPSS at the headquarters of the country’s central bank.
The availability of PoS acceptance devices has grown more briskly than that of ATMs. By FY2019, there were 56,911 PoS acceptance devices in use, 48 for every 100,000 adults, according to the SBP. The central bank estimates that the digitization of payment system will represent a potential market of $36 billion by 2025.
Pakistan’s market is mainly dominated by cash-based commercial transactions with very little use of electronic payments, especially by micro and small retailers. The country’s economic managers hope that the digitization of the economy will also provide sufficient resources for investment purposes.
“Digital inclusion is part of our strategy which will ultimately provide pool of massive resources for financing investment in Pakistan,” Dr. Baqir said. “It will be easier to make and receive payments which will also help people save and plan their financial future better.”
Speaking on the occasion the World Bank president called on banks and other institutions to collaborate and increase the number of individuals and formal businesses using the system, saying: “An increase in the number of users will bring down the cost of transactions.”
Malpass also offered the help of the World Bank to implement the national payment strategy as part of the global push for digital financial inclusion. “The [State Bank] governor can call me or my team,” he added. “We have a very strong team in Pakistan with expertise, energy and drive. We want to help make [the system] work.”
Officials say the objective of the government’s strategy is to make recommendations to design a National Payments System that is in compliance with international standards and best practices, besides being tailored for specific circumstances and needs for a safe, efficient and inclusive National Payment Systems in Pakistan.