In a landmark move towards digitising government transactions, the State Bank of Pakistan (SBP) announced plans to channel all government payments through Raast, the country’s instant payment system, by the end of fiscal year 2025-26. The initiative aims to accelerate financial inclusion, reduce reliance on cash, and strengthen the formal banking ecosystem across Pakistan.
Speaking at the launch of a study titled “Merchant Payments on Raast: Responsible Pricing for Impact and Inclusion,” SBP Deputy Governor Saleem Ullah emphasized the central bank’s aggressive push for digital payments. “We have plans that with the close of this fiscal year, all government payments will go to Raast. We are working very aggressively,” he stated, underscoring the importance of partnerships between government, banks, fintechs, and merchants in achieving a cash-light economy.
To encourage merchants to adopt the platform, the government has announced a subsidy program for person-to-merchant (P2M) QR code-based transactions. The scheme, which runs for three years, will pay merchants 0.5% of each transaction or Rs. 100, whichever is lower, effectively minimizing the cost of going digital. For the period from September 2025 to June 2026, the government has allocated Rs. 3.5 billion to fund the subsidy program.
Deputy Governor Ullah highlighted the broader economic benefits of this initiative. With more than Rs. 11.2 trillion in cash circulating in the economy, bringing even Rs. 2.5 trillion to Rs. 3 trillion back into the banking system could benefit banks, fintechs, and all stakeholders while helping formalize a significant portion of the informal economy. “The ultimate goal is to win the war against cash, and that can only be achieved through partnerships and collaborations among stakeholders. This will accelerate digitalisation of the economy and expedite inclusive growth,” he said.
The UN-based Better Than Cash Alliance, which conducted the study in collaboration with SBP, industry stakeholders, and financial service providers, recommended a fee structure for merchants using Raast. The study suggests a 0.35% Merchant Discount Rate (MDR) floor across most sectors to protect acquirers that rely on transaction-based income. It also proposes specific rates for price-sensitive sectors such as fuel, education, and utilities, and higher-risk areas like e-commerce. Microtransactions under Rs. 300 are recommended to have zero fees, and P2M data will not be used for tax enforcement in the initial phase.
According to L. Nshuti Mbabazi, Managing Director of Better Than Cash Alliance, Pakistan has the infrastructure, banking appetite, and connectivity required to potentially go cashless within the next three years. She urged policymakers to implement effective regulations that foster inclusivity while mobilizing trillions of rupees in the economy.
Raza Matin of Pakistan Leads highlighted that while pricing structures are necessary for merchant sustainability, there is currently no plan to impose fees on person-to-person (P2P) transactions on Raast, ensuring ease of adoption for everyday digital transfers.
The SBP’s initiative represents a pivotal step toward digitalising Pakistan’s payments landscape, promising to enhance transparency, reduce informal cash flows, and create a more inclusive and efficient financial ecosystem.
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