By Moaaz Manzoor

Pakistan’s retail payments system recorded significant growth during the second quarter of fiscal year 2025-26, with total transactions reaching 3.4 billion and their value rising to Rs167 trillion, reflecting continued expansion in the country’s digital financial ecosystem. According to the Payment Systems Quarterly Review for Q2 FY26, available with Wealth Pakistan, the volume of retail payments increased by 8% from the previous quarter, up from roughly 3.1 billion transactions.

The value of these payments also rose from Rs157 trillion in the preceding quarter, indicating steady growth in both transaction frequency and monetary size. The report shows that retail payments continued to form the backbone of Pakistan’s payment landscape, covering a wide range of financial activities, including fund transfers, merchant payments, bill payments, cash withdrawals, and deposits.

These transactions were processed through a combination of digital channels and over-the-counter (OTC) services offered by banks, microfinance banks, branchless banking service providers, and electronic money institutions. During the quarter under review, the bulk of retail transactions was driven by fund transfers, which accounted for the largest share in both volume and value terms.

A total of over 1.5 billion fund transfer transactions were recorded, highlighting their central role in everyday financial activity. Merchant payments also contributed significantly, with more than 500 million transactions, followed by bill payments and mobile top-ups, which stood at around 359 million. Cash-related transactions continued to remain part of the system, with more than 319 million cash withdrawals conducted through ATMs, bank branches, and agent networks.

In addition, around 72 million transactions were recorded for cash deposits, indicating continued reliance on physical cash alongside digital modes. The report highlights that retail payments are supported by an extensive financial infrastructure that includes bank branches, ATMs, point-of-sale (POS) machines, and branchless banking agents spread across the country. This infrastructure enables access to financial services for a wide range of users, including individuals, businesses, and government entities.

Pakistan’s payment ecosystem has been evolving with the integration of digital technologies and the expansion of formal financial services. Banks and branchless banking providers continue to play a key role in facilitating transactions, while electronic money institutions are contributing to the growth of wallet-based payments. The quarterly data reflects sustained activity across both digital and traditional channels, indicating that retail payments remain a key component of the country’s financial system.

The steady increase in transaction volume and value during the quarter underscores the ongoing expansion of payment services and their growing use in routine financial operations. The review notes that the continued growth in retail payments is supported by improvements in payment infrastructure, increased accessibility of financial services, and the rising adoption of digital channels across different segments of the population.

Credit: INP-WealthPk