Need for achieving 1m Raast P2M QR codes by 2025 stressed

KARACHI: Pakistan must achieve one million Raast person-to-merchant (P2M) quick response (QR) codes by the end of 2025 to drive the formalisation of cash-based transactions in the retail sector, Jazz chief executive said.

Aamir Ibrahim, CEO of Jazz, suggested this after the annual payments review by the State Bank of Pakistan for the fiscal year ended June 30 was released last week.The report revealed that the share of digital payments in Pakistan by volume increased from 76 per cent in FY23 to 84 per cent in FY24. It also noted remarkable growth in retail payments during FY24, with the volume of transactions rising from 4.7 billion to 6.4 billion. The value of these transactions increased from Rs403 trillion to Rs547 trillion, marking a growth of around 35 per cent in both volume and value.

The branchless banking wallets are playing an important role in driving digital financial inclusion in Pakistan, Ibrahim said in a post on the social media platform X on Monday.During FY24, branchless wallets recorded 2.7 billion transactions worth Rs8.8 trillion, showing impressive growth rates of 58 per cent in volume and 119 per cent in value compared to the previous year, he said.

Furthermore, branchless wallet transactions surpassed mobile banking by 1.4 times, with 1.5 billion more transactions during the same period. Ibrahim noted that these figures only capture a portion of the financial landscape, as they represent activity through formal financial institutions. “The true scale of the parallel cash-based economy remains unknown, highlighting the need for a stronger focus on integrating it into the formal system,” he said.

To accelerate this integration, he proposed setting time-bound targets, starting with an ambitious goal.“Let’s aim to achieve 1 million Raast P2M QR codes by the end of 2025,” he said.

He pointed out that the launch of Raast person-to-merchant payments presents a significant opportunity to supercharge the economy by enabling seamless digital payments for millions of merchants.

The SBP introduced an interoperable Raast P2M service last year to facilitate digital payment acceptance for merchants and businesses. The P2M service allows businesses to accept payments using QR codes, Raast Alias, International Bank Account Number, and Request to Pay. The SBP expects the Raast P2M service to accelerate the digitization of merchant and business transactions in Pakistan.

Raast is Pakistan’s instant payment system that is leading the way in increasing the adoption of digital payments.Ibrahim believes that digital payments must always be cheaper than cash in order to encourage people to use them. He praised the initiative of a reduced sales tax rate on digital payments compared to cash transactions at restaurants in Punjab and Sindh and expressed hope that other sectors and provinces would also adopt this approach.

He also advocated for the public sector to lead by example by mandating organisations such as the Utility Stores Corporation, Central Directorate of National Savings, and Pakistan Post to prioritise digital payments and gradually phase out cash transactions. He further emphasised the urgent need for government intervention to ensure that a digital payment option is accessible at retail outlets.

Ibrahim highlighted India’s United Payments Interface (UPI), which transformed the way even the smallest retailers conduct business. “In India, fintech platforms built credit and data solutions on top of the payment infrastructure, leading to a thriving ecosystem. We can adopt similar strategies to support our own merchants and drive financial innovation,” he said.