Pakistan pushes mobile phones over bank accounts to help unbanked consumers ditch cash

ISLAMABAD: The State Bank of Pakistan (SBP) will roll out a new feature from October 2021 this year allowing customers to use their mobile numbers instead of bank account numbers to receive instant payments, Pakistani media reported on Thursday.
Pakistan has the third largest unbanked adult population globally with about 100 million adults without a bank account, according to the World Bank. Phone-based banking has proven a hit among the poor in other emerging markets such as China, India and Kenya. Those efforts have been driven by private sector companies that offer user-friendly, affordable apps.
Whether Pakistan's state system will prove as nimble and easy to use remains to be seen. And it will initially require help from the very same banks that for decades have shut out low-income Pakistanis with pricey fees.
“A customer can link his/her mobile number ... with their bank account number under Raast (indigenous instant payment system),” SBP Payment System Department (PSD) Director Syed Sohail Javaad was quoted as saying by the Express Tribune. “This feature will be rolled out in October 2021.”
Speaking at the UBL Digital Mobile Commerce 2021 this week, Javaad said that in the near future, people would be able to use their mobile numbers instead of bank account numbers to receive instant payments.
Last month, Bloomberg reported that Islamabad-based fintech startup TAG Innovation Pvt. was set to become Pakistan’s first digital bank when it started operations in June in the world’s fifth most populous nation where 70% of adults don’t have a bank account.
TAG joins other digital payment startups in raising funds as digital banks take off in emerging markets where millions lack access to banking services. Razorpay, an Indian startup that facilitates digital payments, said in April it was raising $160 million, while Egyptian digital banking app Telda raised $5 million last month.