SBP Devises Strategy to Expand Mobile Banking to 50 Million Users: Governor

The State Bank of Pakistan, in collaboration with the World Bank, has developed a strategy to make a multifold surge in mobile account holders to over 50 million in the next five years, as branchless banking remains an effective channel to expand outreach of unbanked and under banked people.

Ashraf Mahmood Wathra, governor of the central bank, said:

The National Financial Inclusion Strategy, recently developed by the State Bank of Pakistan in collaboration with the World Bank envisions that the uptake of M-wallet accounts will cross 50 million over the next five years.

He was addressing a gathering at the 8th International Mobile Commerce Moot, which was organized by Total Communications in collaboration with State Bank of Pakistan (SBP) and Pakistan Telecommunication Authority (PTA).

Mobile Banking Statistics in Pakistan:

  • Total branchless banking customers: 5 million
  • Total monthly volume of branchless banking: PKR 24 million
  • Total value of branchless banking: PKR 125 billion

At present, five million customers hold branch-less banking accounts (m-wallets) to avail host of services including fund transfer, utility bills payments, domestic remittances, mobile top ups, loan repayment, and saving account features. Presently, monthly volume of branchless banking transactions is 24 million, valuing Rs 125 billion.

Dr. Syed Ismail Shah, Chairman-PTA, said PTA and the State Bank of Pakistan (SBP), were working in close coordination to develop the regulatory framework that supports growth in the mobile banking sector.

He said that the recent launch of 3G/4G spectrum has revolutionized the lifestyle in Pakistan and it is playing an important role in socioeconomic development. He added:

The spectrum is not only helping increasing number of mobile account holders to the required level, but it is also playing a pivotal role in nurturing other sectors, including education, health, commerce, and entertainment.

Furthermore, the number of mobile broadband subscribers has reached 14 million in the last eight months and is expanding by one million new subscribers every month on average.

During his keynote on ‘silent financial inclusion’, Nadeem Hussain, CEO and President, Tameer Microfinance Bank talked about the overall ecosystem of branchless banking in Pakistan – highlighting potential of growth and future challenges. He said,

“We have observed phenomenal growth during the last few years in the branchless banking industry with the help of enabling regulatory framework provided by the State Bank of Pakistan. It is high time for the industry to shift its focus from over the counter services to mobile wallets, for which we will have to create more awareness among prospective customers.

Easypaisa is already providing innovative solutions to its customers through mobile accounts – creating enough value for them to shift from traditional banking system towards mobile financial services.”

Mr. Nadeem also presented case studies of different countries with strong penetration of mobile money services and identified steps that will further boost the pace of growth of local industry.

Yahya Khan, Head of Easypaisa delivered a thought-provoking presentation on ‘Next generation mobile money services’ – presenting as to how the future would look like with virtually unlimited possibilities unlocked by mobile money services. “With a vision to provide convenience to its customers, Easypaisa has completely transformed the financial services industry and will continue to maintain its thought leadership with groundbreaking solutions as per the evolving needs and preferences of its customers.” He also urged all the industry stakeholders to create synergies, in line with Easypaisa’s commitment to empower people through innovate technologies and subsequently accelerate socio-economic development of Pakistan.

Atif Aslam Bajwa, President, Bank Alfalah, said banks should take advantage of technological advancement. Otherwise, they would be drive out of the market. “Becoming a digital bank soon is a matter of survival,” he said.

Davor Ebling, Global Director, Mobile Money Operations – SAP, said penetration of mobile banking is much higher than the conventional banking globally.

Ghazanfer of Waseela Bank said NADRA should reduce its verification charges for opening a mobile bank account to less than one rupee from current Rs20-30, as it is offsetting the benefits to stakeholder of m-wallet.

The one-day conference also held though provoking and knowledge sharing sessions and panel discussions like “Challenges for making Mobile Wallet Secure”, “Protecting the Customer” and “Interoperability key to Scale in Pakistan.”