Mehmood ul Hasan Qadir — Economist & Financial Analyst | Dubai, UAE

The Pakistan Ledger | Opinion

In 2021, the State Bank of Pakistan launched Raast — an instant payment system enabling person-to-person transfers, bill payments, and merchant transactions through a central interoperable infrastructure. In the same period, JazzCash and Easypaisa — the two dominant mobile financial service providers — were processing tens of millions of transactions monthly across a network of agents and digital accounts that reached populations far beyond the traditional banking system’s geographic and demographic footprint. The ingredients for a digital payments revolution are present. The question is whether they will combine into a genuine economic transformation, or whether Pakistan will follow the familiar pattern of promising technology adoption followed by insufficient scaling.

The SBP Data — Where Pakistan Actually Is

SBP’s annual digital payments report documents steady growth in transaction volumes across all digital payment categories — account-to-account transfers, mobile banking transactions, point-of-sale terminals, and internet banking. Raast registered accounts crossed several million within its first two years, with person-to-person transfer volumes growing rapidly from a low base. Mobile banking users are estimated at 15–20 million, with Easypaisa and JazzCash accounts — many classified as mobile money rather than bank accounts — adding substantially more digital financial service users.

But the aggregate numbers, while encouraging directionally, must be contextualised. Pakistan’s total digital payment transaction value as a percentage of total economic transactions remains very low. Cash dominates — in retail, in agriculture, in informal sector commerce, and in the grey economy that represents a significant share of Pakistan’s actual economic activity. The formal banking system reaches approximately 21% of adults by account ownership metrics; active, regular users of digital payment services are a smaller subset still. Pakistan is at the beginning of a digital payments journey, not in the middle of one.

The India UPI Comparison — Scale and Speed

India’s Unified Payments Interface launched in 2016. By 2024, UPI was processing over 10 billion transactions per month — more than the rest of the world’s real-time payment systems combined by some measures. The UPI architecture is interoperable across banks and fintech applications, freely accessible to all participants, and has been adopted at merchant level down to street food vendors and auto-rickshaw drivers in major Indian cities. The monthly transaction volume of UPI alone exceeds India’s GDP/12 by value, indicating that the system is now genuinely capturing economic activity rather than serving as a supplementary payment option.

Raast’s architecture is conceptually similar to UPI. The fundamental difference is adoption speed and ecosystem depth. India’s UPI success was driven by a combination of the government’s demonetisation shock of 2016 — which created an overnight incentive to adopt digital payments — the smartphone penetration that was already sufficient to support mass adoption, and the competitive fintech ecosystem that built compelling applications on top of the UPI rails. Pakistan’s Raast rollout has been more measured, the smartphone penetration curve is trailing India’s by several years in rural and lower-income segments, and the merchant adoption infrastructure requires investment that market forces alone are not yet generating.

The Kenya M-Pesa Lesson — Agent Network as Infrastructure

Kenya’s M-Pesa succeeded not primarily because of its technology but because of its agent network. The physical cash-in, cash-out agent network that M-Pesa deployed across Kenya — including in rural areas where banking infrastructure did not exist — was the bridge between the digital payment system and the cash economy in which most Kenyans transacted. JazzCash and Easypaisa have deployed comparable agent networks in Pakistan — with hundreds of thousands of registered agent points across urban and rural areas. This is Pakistan’s single most important digital financial inclusion infrastructure asset.

The constraint is transaction cost and agent economics. Agents earn margins on cash transactions that create incentives to keep transactions in cash rather than nudge customers toward digital. The regulatory and pricing framework that would make digital transactions economically competitive with cash at the agent level — and therefore incentivise agent-driven digital adoption in the way that M-Pesa achieved — requires more deliberate design than it has received.

Cautious Optimism — With Conditions

Pakistan is finally building the infrastructure for a real digital payments economy. Raast is a genuinely well-designed central payment rail. JazzCash and Easypaisa have demonstrated that mobile financial services can reach previously unbanked populations. The regulatory framework under SBP has been more forward-looking on digital finance than on most other financial sector innovation challenges. The optimism is warranted — conditionally. The conditions are: interoperability must be deepened and enforced, not just mandated; merchant adoption must be incentivised through smart subsidy or tax incentives rather than hoping for organic growth; the agent network economics must be reformed to make digital transactions as profitable as cash for agents; and the remaining infrastructure barriers — smartphone penetration, reliable mobile data coverage, digital literacy — must be addressed with as much energy as the fintech layer itself. Digital payments are a foundation. The building is not yet up.

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Mehmood ul Hasan Qadir is an Economist and Financial Analyst based in Dubai, UAE. He writes on Pakistan’s economic structure, policy failures, and reform pathways for The Pakistan Ledger.