In a major step towards accelerating Pakistan’s shift to a cashless economy, the federal government has approved a Rs3.5 billion subsidy to promote merchant onboarding and expand digital payments through Raast QR codes. The initiative, overseen by the State Bank of Pakistan (SBP), is expected to give a strong push to Person-to-Merchant (P2M) transactions across the country, encouraging broader adoption of cashless payment solutions.
The SBP confirmed that the subsidy will apply to P2M transactions conducted between September 1, 2025, and June 30, 2026. Under the framework, financial institutions will be compensated at a rate of 0.5 percent of each transaction value or Rs100, whichever is lower. This incentive is part of the Prime Minister’s Cashless Economy program, designed to reduce reliance on cash and make digital payments easier, faster, and more accessible for merchants as well as consumers.
The subsidy mechanism has been structured to benefit both sides of a transaction. According to SBP, the financial support will be shared equally between the merchant’s financial institution and the customer’s financial institution. This dual-coverage ensures that both acquiring and issuing banks are incentivized to drive QR adoption.
To complement the subsidy, regulated entities will be allowed to charge up to 0.25 percent of the transaction value for onboarding and servicing merchants. Payments under the scheme will be made to financial institutions on a quarterly basis. However, the SBP clarified that if total claims surpass the Rs3.5 billion annual ceiling, the subsidy rate will be adjusted downward to keep disbursements within budgetary limits.
The central bank has directed all regulated entities, including banks, microfinance banks, electronic money institutions, payment system operators, payment service providers, merchant service providers, and customer service providers, to follow the prescribed process strictly. Only transactions successfully processed through the Raast system will qualify for subsidy claims, ensuring transparency and efficiency.
To manage accountability, institutions are required to submit quarterly claims verified by their internal audit departments within five working days of the quarter’s close. These claims will be cross-checked by Raast Payments Pakistan against system data. Any discrepancies found will be communicated to the concerned institution within five working days. Institutions must reconcile differences and resubmit final claims within another five working days, after which the subsidy amount will be deemed accepted.
The SBP further noted that its inspection teams may verify subsidy claims during their regular on-site inspections. For the launch period, the subsidy claim for September 2025 will be bundled with claims for the quarter ending December 31, 2025. All disbursements will be made once the Finance Division sanctions and releases the allocated funds.
This program is positioned as a key enabler of Pakistan’s digital finance ecosystem, lowering barriers for merchants to adopt QR payments and fostering consumer trust in digital transactions. By incentivizing institutions and businesses alike, the government aims to reduce dependency on cash and strengthen the overall digital payments infrastructure.
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