Ashraf Mahmood Wathra, Governor State Bank of Pakistan inaugurated Pakistan’s first domestic Payment Scheme in Karachi on 5th April 2016. The new payment scheme has been branded as “PayPak” and will compete in the domestic market with other international payment schemes. However, the new card will only be used within Pakistan and will offer the benefit of low cost, ease of affordability and security to ordinary citizens.
It may be recalled here that “PayPak” has been introduced by 1Link which is already providing interoperability services for ATM transactions as well as interbank fund transfers and utility bill payment facility. With this launch, Pakistan became the 28th country in the world to have her own domestic payment scheme.
The Governor emphasized that secure and efficient payment systems are critical for effective functioning of the financial system and crucial for the provision of digital financial services like collecting and making payments; making deposits and obtaining credit; buying goods; paying utility bills; paying for housing, healthcare, insurance and education; remitting money to friends, family, and business partners. These services may be availed by using channels such as mobile phone, kiosk, or other digital interfaces.
The Governor informed the audience that one of the strategic goals of SBP for the year 2020 is to transform the digital payments landscape in the country by ensuring digital financial access to both the un-served and underserved population while at the same time reducing the transaction cost and improving overall efficiency.
The Governor appreciated the launch of the domestic payment scheme and expressed that this initiative will not only provide affordable, safe, and efficient alternative to the existing banked population in the country but will also provide an opportunity to offer low cost payment services to the unbanked citizens thus bringing them in the sphere of financial inclusion. The Governor expressed hope that this launch will catalyze the adoption and usage of plastic card among consumers, merchants and banks in Pakistan. Furthermore, launch of domestic payment scheme will also help in reducing the outflow of foreign exchange to International Payment Schemes as a part of fee payment.
Governor urged the financial sector in the country to take advantage of the current favorable market environment by investing in innovative technologies and product offerings to expand payment services and broaden access to financial services in Pakistan. He urged the banks in Pakistan to rapidly adopt the new payment scheme and ensure that its benefits are transferred to ordinary citizens.
Saeeed Ahmad, Deputy Governor SBP, said that by introducing this scheme Pakistan has moved in the right direction by achieving SBP’s two strategic goals i.e. promoting Financial Inclusion and building a Robust and Modern Payment System. He, however, pointed out that while the issuance of domestic card is a good initiative, the banking sector has to create its acceptability among the masses. He advised the banking industry to adopt a more service oriented approach and provide easy access to financial services to their customers.
Earlier, Javaad Khan, Partner of Mackenzie & Co. appreciated the initiative of introducing domestic card scheme and informed that this is the need of the Pakistani market. He informed the audience that with this launch, Pakistan has become one of the few countries who have their own payment scheme. He quoted the case of some other countries like India and Mexico and said that research has shown that countries with their own payment schemes are better able to provide financial services to all levels of their population.