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Biometric mobile banking significantly improving financial inclusion in Pakistan

by Haroon Amin
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In recent years, Pakistan has witnessed a remarkable transformation in its digital payments environment, with mobile banking playing a primary role in promoting financial inclusion. According to a State Bank of Pakistan (SBP) report, the number of Pakistani users of internet banking reached 11 million, while the number of users of biometric mobile banking reached 16 million by the end of 2023—an increase of almost a million from the previous quarter. This rise indicates a definite trend towards digital transactions, which is changing the financial environment in the nation. The notable 15% increase in e-wallet registrations to 2.7 million further points to a substantial shift in favour of digital finance.

According to the report, there was a significant increase in mobile banking transaction volume from 3 billion rupees (US$29 million) in the financial year 2012-13 to 15 billion rupees ($143 million) in 2022–2023. This represents a growth of over 450 percent. The fact that there are already more than 107 million mobile wallet accounts shows how popular digital payment systems are. Among the initiatives launched by the administration of former Prime Minister Imran Khan to transition Pakistan to a cashless economy are the RAAST and Roshan digital accounts. The State Bank of Pakistan has ushered in a new era of digital banking with the release of the Exposure Draft of the Digital Bank Regulatory Framework, which ensures better access to financing and innovation.

  • Research-related insights

According to a research report on the growth of online banking services in Pakistan published by the South Asian Journal of Management Sciences, there have been significant changes in the banking sector between 2006 and 2021. This report emphasises how banks are depending more and more on technology to deliver high-quality digital banking services, particularly internet-based services. The study has employed SWOT analysis to demonstrate that the supply of online banking services in Pakistan faces more chances for expansion than dangers.

Read more: Pakistanis spent 99 billion hours on their Android phones, ranks 10th globally in usage

The digital disparities in Pakistan are examined in research released by Science Direct in 2021, with a focus on internet access and usage as well as information and communication technology (ICT) technologies. It provides an overview of a number of problems, such as gender disparities, urban-rural disparities, and legislative obstacles to complete digitization plans.

  • Financial inclusion: The Asaan mobile account programme

The Asaan Mobile Account (AMA) is beneficial to Pakistan’s underprivileged communities. According to recent data, the percentage of Pakistani adults who have access to financial services is just 30%, with a significant gender disparity. However, in 2023 alone, AMA opened almost 7 million accounts, of which 35% were held by women. Pakistan has pledged to support the EDISON Alliance in its efforts to promote digital inclusiveness in keeping with this.

  • Raast: enabling electronic commerce

When it comes to digital financial services, the fast payment system Raast has ushered in a new era of convenience for the masses dispersed throughout Pakistan. With its smooth characteristics, Raast has evolved into a central facilitator. In the second quarter of the financial year 2023–24, it facilitated 107 million fund transfer transactions, showcasing its significant contribution to increased efficiency and convenience in the digital payments market.

  • Easy Paisa and JazzCash are Pakistan’s top mobile banking providers.

EasyPaisa and JazzCash stand out among the fintech payment gateways that are growing in popularity in Pakistan since they offer both individual and commercial solutions. With almost 16 million active monthly customers, JazzCash is the fintech division of telecom giant Jazz, providing safe online payments using QR codes. By 2021, EasyPaisa, owned by Telenor, had amassed more than 25 million registered wallets and 8 million active customers seeking instant access to digital financial services. Furthermore, both systems are built with user-friendly features that enable the establishment of accounts using CNIC and cell numbers in a matter of minutes, providing remote access to digital identity methods.

With the help of apps like JazzCash and EasyPaisa, Pakistan is adopting biometric mobile digital banking, which has increased financial inclusion by adding millions of new accounts and volumes of transactions. Asaan Mobile Account (AMA) and Raast rapid payment system are two examples of efforts that have empowered marginalised groups. But legal restrictions impede the expansion of e-commerce and freelance work by limiting the options for sending money abroad. For sustainable economic growth and fair financial development, bridging domestic and global fintech marketplaces is essential.

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