Karachi: State Bank of Pakistan (SBP) is all set to facilitate people purchasing sacrificial animals using QR code payment mechanism at cattle markets nationwide on the upcoming Eid-ul-Azha, expanding the application of payments through Raast Instant Payment System.
The initiative is being taken to help people and merchants to securely make payments, besides helping banks to potentially tap over Rs550-600 billion cattle purchases through digital banking on the annual religious festival.
While speaking at the 17th international conference titled ‘Mobile Commerce 2024’, organized by Total Communications, SBP, Payment System Policy and Oversight Department, Joint Director, Ahmed Sumair said that the central bank is working with the banks to enable cattle markets and cattle farmers on QR code on the upcoming Eid-ul-Azha.
“We are working with 25 banks…and have selected 50 major cattle markets to enable QR code payment method there,” he said.
He said the markets have been identified in all the 15 cities having SBP field offices including Karachi, Lahore, Islamabad, Rawalpindi, Faisalabad and Hyderabad. “We are coving six cattle markets alone in Karachi on this Eid (falling in mid of June 2024).”
The project is aimed at solving various pain points including the hassle of carrying cash and making payments to purchase sacrificial animals.
Secondly, the project would help onboarding of cattle farmers and expand financial inclusion through Raast, he said.
He said the QR code payment method would revolutionize the payment experience, as high cost of installing POS machines at merchants has its own limitations.
The QR payment has also enabled small merchants to receive payment through online transactions, discoursing the use of cash in the economy. Merchants may display QR code to receive online payment in a realtime and hassle-free manner.
It is important to mention that reducing the high level of Currency In Circulation is one of the strategic objectives of State Bank of Pakistan; which can be achieved by enabling digital acceptance points, through QR codes, in every nook and corner of the country.
Bank Alfalah Limited, Group Head – Chief Digital Officer, Yahya Khan said the cash worth roughly Rs8-10 trillion is in circulation in Pakistan that is very high cash-to-GDP ratio and remained undocumented.
Unveiling the set of recommendations to be presented to Finance Minister Muhammad Aurangzeb soon, Khan, who also heads a banking committee, recommended to discontinue the Rs5,000 notes.
The central bank should replace the big denomination note with Rs1,000 notes through digital banking.
Nadeem Husain, Coach, Planet N Group of Companies and Raqami Islamic Digital Bank, said banking in service and lending would remain key to success for the five digital banks in the making in Pakistan.
However, they would face serious challenges like mobilizing deposits and maintaining cybersecurity to avoid rising fraud with banking customers.
Muhammad Hamayun Sajjad, CEO, Mashreq Bank, said the low operating cost of digital banks (DBs) due to no presence of physical branches would enable DBs to pay higher profit margins to depositors to mobile financing.
The one-day conference also featured two panel discussions including (1) Role of Digital Banks in Pakistan and (2) Person to Merchant use case of Pakistan’s Instant Payment System Raast – A Game Changer in Digital Ecosystem.
