Online banking is gaining ground



A silent digital payment revolution is underway in Pakistan, with the number of mobile and internet banking users and e-commerce transactions showing a strong growth trend during the quarter ended March 31, 2021.

Surprisingly, the number of financial transactions in cash and other forms of paper-based transactions (by volume), as well as the number of physical bank branches, registered a decline during the quarter under review, confirming the rise of the system. online payment. traction and will change the country’s banking landscape, according to the Central Bank of Pakistan on Monday.

“Commercial banks in Pakistan are expanding their digital infrastructure to support electronic payments, which are complemented by the enabling policies of the State Bank of Pakistan (SBP),” the central bank said in its quarterly review of the system. payment (QPSR) for the third quarter (Jan. March) of the current fiscal year 2020-21.

The number of Internet and mobile banking users has increased significantly in recent quarters. Internet banking users increased by 10% to 4.98 million in the quarter under review compared to the previous quarter and increased by 30% compared to the same quarter last year.

Similarly, mobile banking users increased by 5% on a quarterly basis to 9.86 million and increased by 20% compared to the same quarter of the previous year.

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E-commerce merchants have also been on the rise for a few quarters. E-commerce merchants increased by 5% to 2,523 in the January to March quarter 2021 compared to the previous quarter, while they increased by 62% compared to the same quarter last year.

“The numbers can lead us to believe that consumers are realizing the benefits that digital payment channels have in our daily lives. This complements the increase in consumer confidence in using digital channels,” the SBP said.

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There are 16,223 bank branches reported by banks/microfinance banks (MFBs), of which 107 are overseas branches. All branches except 35 offer online banking services to their customers.

“We have seen a decline in the number of branches, which shows that the industry is slowly realizing the benefits of digital payment infrastructure that digital channels bring to the overall consumer experience and its impact on the bottom line,” said said the central bank.

The number of financial transactions via online banking (including mobile, internet and e-commerce) increased by 4% to 309.5 million in the quarter under review, compared to 296.7 million in the previous quarter ended December 2020 .

The value of online banking transactions increased by 5% to reach 22.48 trillion rupees in the January to March quarter of 2021 from 21.47 trillion rupees in the previous quarter.

Other online banking payment methods include real-time online branches (RTOB), ATMs, point-of-sale (POS), and call centers. “ATMs handled the majority of the big chunk with 49% of transactions (volume in online banking).”

Merchants processed around 5.6 million transactions worth Rs 15.3 billion during the quarter under review. The number of paper-based financial transactions fell 4% to 100.2 million in the January-March 2021 quarter, from 104.8 million in the previous quarter.

However, the value of transactions based on paper money increased by 1% to reach 37.7 trillion rupees in the January to March quarter, compared to 37.2 trillion rupees in the previous quarter ended December 31, 2020.

Despite the availability of other ATM banking services, the machines are still primarily used for cash withdrawal in the country. “In total, cash withdrawal through ATMs has the highest volume share of 96% (among other ATM services like paying utility bills and transferring funds through the machines) .”

By the end of the quarter, the industry had deployed 16,175 ATMs nationwide, showing an increase of 134 ATMs. This means that on average, the banking sector has deployed around 1.5 ATMs per day.

During the quarter under review, the industry deployed more than 4,000 POS machines, which reached an all-time high of 67,099.

According to the latest quarterly payments report, the total number of bank accounts has risen to 62 million, with the country’s population standing at 211.93 million.

The value of currency in circulation stood at 6.86 trillion rupees as of March 31, 2021.

As of March 31, 2021, the total number of payment cards issued in Pakistan increased to 44.5 million from 44.2 million in the previous quarter. According to the report, almost 64% of these cards are debit cards, 4% credit cards, 17% welfare cards and 15% ATM cards.

The entire banking sector recorded a 2% growth in the number of all types of financial transactions to 410.8 million, while the value of such transactions jumped 10% to 169.51 trillion rupees during the quarter. under review compared to the previous quarter.

Published in L’Express Tribune, June 29and2021.

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