Ebanking Trends in Pakistan on Rise

Banking transactions made over internet (known as E-Banking) are rapidly getting very common amongst businesses entities and masses in Pakistan. This was reflected in a recent report prepared by State Bank of Pakistan, which read that E-Banking has grown as high as 32 percent growth last year (2008).

This report that got published in print media today, said that, a total of 124.6 million e-banking transactions were recorded valuing Rs 13.9 trillion during the last fiscal year (2008), showing a growth of 25.4 percent in numbers and 32.3 percent in amount when compared with the fiscal year 2007.

This significant growth in e-banking is due to massive use of internet, especially high speed internet in Pakistan. Along with come the factors such as increasing number of free launce workers in the country who work for overseas companies tend to use E-Banking instead of paper banking. Furthermore, those who are living abroad are also increasingly interacting with their bank accounts back in Pakistan from internet.

We also see that E-Banking standards maintained by Pakistan banks are not bad; though some may have bad experiences, but largely, systems are stable and reliable. This reliability and benefits, such as, time saving with E-Banking are fetching more users by each passing day.

With this rise in E-Banking usage, there are certain restrictions too, such as daily and monthly transaction limits are insufficient; which actually hinders business entities and individuals to make E-Banking as their primary banking mode. Bankers say that this low limit is to increase security and allowing least chances for fraudulent activities, but on other hands, consumers require more luxury though with safety.

On the same note, I would like to see e-commerce activities in Pakistan. We see that E-Banking is already given good feedback, along with total number of credit and debit card holders reach 6.7 million, there is a dire need of E-Commerce infrastructure layout in the country, and that too in quick time.

More details on this report titled ‘Retail Payment Systems of Pakistan (paper-based and ebanking), are covered in following news item taken from Dawn’s edition of September 14, 2008.

Sept 13: E-banking is flourishing in Pakistan as reflected by a 32 per cent growth witnessed in it last year, said a report prepared by the State Bank.

“Electronic banking (E-banking) is getting increasingly popular as the number and value of ebanking transactions in the country have shown a significant growth in the last fiscal year,” said the SBP report.

According to a report titled ‘Retail Payment Systems of Pakistan (paper-based and ebanking)’ of the State Bank of Pakistan, a total of Rs124.6 million e-banking transactions were recorded valuing Rs13.9 trillion during the last fiscal year (2008), showing a growth of 25.4pc in numbers and 32.3pc in amount when compared with the fiscal year 2007.

During FY08, the volume and value of e-banking channels (POS, Internet & call centre/IVR, and mobile) transactions in the country reached 20.0 million and Rs120.1 billion, depicting an increase of 15.6 per cent in numbers and 31.9 per cent in value as compared to 46.0 per cent in numbers and 63.8 per cent in value in the previous fiscal year.

According to the report, the quantity of active (in-use) debit / credit cards during FY08 reached 6.7 million, which shows an aggregate growth of 15.8 per cent, compared with a 53.7 per cent increase in the previous fiscal year.

The quantity of credit cards has in fact decreased by 8.9 per cent as compared to 74 per cent increase in the previous fiscal year, reaching 1.5 million.

In contrast, the debit cards registered a growth of 24.7 per cent as compared to 45.3pc increase in previous fiscal year and stood at 5.0 million.

The report pointed out that the total number of ATMs during FY08 stood at 3,121, registering a growth of 21.0 per cent as compared to 17.0 per cent increase in the previous fiscal year.

The volume of Real Time Online Branches (RTOB) during FY08 stood at 5,282 and recorded a growth of 26.4 per cent as compared to 5.0 per cent decline in the previous fiscal year.

The volume of Point of Sales (POS) stood at 55,853, showing a growth of 21.0 per cent in number as compared to 4.0 per cent increase in the previous fiscal year.

According to the report, during FY 08 the volume and value of ATM transactions in the country reached 67.9 million and Rs453.0 billion, showing an increase of 31.8 per cent in numbers and 43.2 per cent in value as compared to 47.1 per cent increase in numbers and 49.9 per cent in value in the previous fiscal year.

Moreover, the volume and value of RTOB transactions in FY08 reached 36.9 million and Rs13.3 trillion, showing an increase of 19.9 per cent in numbers and 32 per cent in value as compared to 46.2 per cent increase in numbers and 49.0 per cent in value in the previous fiscal year.

The report said that the volume and value of paper-based transactions in the country duringmbers and  FY08 reached 334.4 million and Rs.137.4 trillion, registering an increase of 3.1 per cent in numbers and 20.9 per cent in value as compared to 48.1 per cent increase in numbers and 29.4 per cent in value in the previous fiscal year.

According to the report, the overall total retail payments in the country during FY08 stood at 459.0 million and Rs.151.3 trillion respectively registering an increase of 28.4 per cent in number and 21.8 per cent in value as compared to 17.2 per cent increase in numbers and 35.0 per cent in value in FY07.

Retail payments are mainly made by consumers and between commercial counterparties to purchase goods and services.

At the retail level, most transactions use paper-based instruments. However, electronic mode is also getting momentum with the passage of time. Retail payments in Pakistan comprise various paper-based and electronic instruments from conventional cheques to modern smart cards.