Pakistan’s national payment scheme PayPak has expanded its footprint significantly across the country’s banking system, but the gap between its issuance and actual usage remains a major concern for regulators. According to the latest industry data, PayPak cards now represent more than 25% of the 53 million debit cards in Pakistan. However, despite this considerable presence, their usage stands at only 6%, underscoring structural and perception challenges that continue to limit wider adoption.
This imbalance has prompted regulatory authorities to intensify efforts to promote co-badged debit cards, which combine local and international schemes to support both domestic and cross-border transactions. A press release issued on Tuesday highlighted this regulatory push, noting that broader deployment of co-badged solutions could reduce Pakistan’s reliance on foreign payment networks while improving the long-term viability of local systems.
Speaking at an industry event, State Bank of Pakistan (SBP) Governor Jameel Ahmad explained that PayPak’s low usage is linked to multiple factors, including its limited international and e-commerce acceptance, modest marketing outreach, and a general perception that PayPak serves as a low-value product. He emphasized that addressing these barriers is essential for enabling Pakistan’s local payment scheme to compete effectively and sustainably within a rapidly digitizing economy.
Governor Ahmad also pointed to rising momentum in co-badging partnerships. He referenced recent collaborations, such as the newly launched Faysal Bank–Mastercard–PayPak debit card and the earlier PayPak–UnionPay arrangement, as examples of hybrid models that expand consumer options while keeping domestic transactions settled within Pakistan. These arrangements not only broaden payment capabilities but also support the country’s strategic goal of reducing dependence on foreign networks.
Reflecting on PayPak’s journey since its inception in 2016, the Governor reiterated that the scheme was intended to provide a cost-effective solution tailored to the needs of local consumers and businesses. However, he noted that stronger marketing efforts, improved acceptance infrastructure, and deeper consumer engagement are needed to unlock its full potential.
He also encouraged 1Link, the operator of PayPak, to adopt a long-term development strategy focused on technology upgrades, enhanced cybersecurity frameworks, improved dispute-resolution mechanisms, and greater incentives for merchants and consumers. These measures, he said, are vital to building trust and accelerating mainstream adoption.
Recent data from the State Bank of Pakistan’s Annual Payment Systems Review FY25 highlights the rapid growth of digital payment channels across the country. E-banking transactions surged by 46% in volume to nearly 3 billion and by 39% in value to Rs223 trillion. Despite this strong growth, PayPak’s usage gap continues to reflect limitations in the national payments infrastructure, particularly around e-commerce acceptance.
Point-of-sale (POS) adoption also strengthened during the year, driven by merchant onboarding efforts and incentives from acquiring banks. The nationwide POS network expanded to more than 131,000 terminals, while POS transactions rose to 211 million, representing 23% annual growth in volume and 33% in value to Rs3.6 trillion. Although encouraging, electronic payments still represent a small share of total retail activity in Pakistan.
The report further showed that international card schemes continue to dominate domestic usage, highlighting ongoing concerns about settlement costs and foreign network dependency. Meanwhile, ATM usage remained steady, with 18,245 machines processing 635 million withdrawals worth Rs9.6 trillion. Cash deposit machines and CRMs handled 275 million deposits valued at Rs5.6 trillion, reflecting gradually increasing comfort with automated banking channels.
Overall, the SBP’s data portrays a payments ecosystem that is evolving but not yet fully transformed. While digital transactions are rising quickly, PayPak’s limited usage signals persistent gaps that must be addressed to create a more balanced and resilient retail payments landscape. Regulators view co-badged cards as a practical way forward, offering consumers better functionality while supporting Pakistan’s broader digital transformation goals.
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