State Bank of Pakistan issues guidelines to boost digital payments

KARACHI: State Bank of Pakistan (SBP) has issued new guidelines, including making it mandatory for banking industry to offer PayPak service to customers, for improving card payment acceptance with an aim to boost financial inclusion, a statement said on Monday.

“The banks are now bound to offer the domestic payment scheme card, PayPak, to the customers as a first priority, whereas cards of international payment schemes like Visa, MasterCard and Union Pay may be issued on the request of the customer,” the central bank said in its statement.

“Secondly, the MDR (merchant discount rate) i.e., the fee charged by banks to the merchants, will now be in the range of 1.5 to 2.5 percent.” It must be noted that earlier the banks were allowed to charge any fee to the merchants.

The central bank said the distribution of revenues generated from a merchant among the players including card issuer, card machine deploying entity, and the payment scheme company, had also been rationalised to keep the incentives equitable among all the players.

It said these measures were expected to increase payment card acceptance access points in the country and in turn will also help in digitising the economy and promoting financial inclusion.

To remove the gap in cheque clearing whereby it took weeks to clear cheques in far flung areas of the country, the SBP said it had allowed the use of Pakistan Real Time Interbank Settlement Mechanism (PRISM) for the settlement of cheques.

It would not only help decrease the processing time for clearing of payment instruments in areas not easily accessible, but would also help financial institutions in remote areas to leverage digital channels for their clearing and settlement obligations, the central bank said in its statement. It may be recalled the SBP had launched the National Payment Systems Strategy in November 2019 and had since taken a number of steps to promote digitisation of payment transactions in the country.