Online Banking Transactions Cross 400 Million in Q2 FY22

Online Banking Transactions Cross 400 Million in Q2 FY22 in 2022

According to the State Bank of Pakistan, the volume of e-banking transactions in Pakistan increased by 10.7 percent to 400 million during the second quarter of the fiscal year 2021-22. (SBP).

According to the latest SBP data, the value of digital banking transactions increased by 22.8 percent to Rs. 33 trillion. The volume of transactions increased by 41 percent to 1.4 billion in calendar year 2021, while the value of transactions increased by 45 percent to Rs. 106 trillion.

Today, the State Bank of Pakistan published its second quarterly report on payment systems for the fiscal year 2021-22, covering the months of October to December 2021. The report paints a positive picture of digital banking adoption in the country.

Customers’ preference for e-banking continued during the quarter under review, rising to 10.7 percent in volume and 22.8 percent in value of transactions on a Quarter-on-Quarter (QoQ) basis. E-banking refers to transactions that take place through electronic channels such as real-time online branches, ATMs, mobile banking, internet banking, call center banking, POS, and eCommerce. It is worth noting that the growth rate of e-banking transactions is much faster than that of paper-based transactions, despite the fact that the value of transactions is higher in the latter case.

Paper-based transactions increased in volume and value by 3.4 and 12.2 percent, respectively. While the volume of e-banking transactions is nearly four times that of paper-based transactions (400 million vs. 101.4 million), the value of the former is Rs. 33.4 trillion vs. Rs. 41.6 trillion for paper-based transactions.

Overall, e-banking growth included expansion in both mobile and internet banking, with a double-digit increase in transaction value and volume during the second quarter. The number of mobile banking transactions reached 94 million, with a value of Rs. 2.2 trillion, representing 18.8 percent and 35.4 percent growth, respectively, on a QoQ basis.

Meanwhile, the number of mobile banking users increased by 5% year on year, reaching 11.9 million. The number of internet banking users reached 6.9 million, with 33.8 million transactions totaling Rs. 2.4 trillion, representing a strong 13.9 percent increase in volume and a 28 percent increase in value over the previous quarter.

The retail sector’s adoption of digital payments has also increased. 92,153 Point-of-Sale (POS) terminals processed 31.4 million transactions totaling Rs. 178.1 billion during the quarter. This represents an impressive double-digit year-on-year growth of 11.8 percent by volume and 32.1 percent by value. Similarly, the number of e-Commerce merchants increased by 32.6 percent, reaching 3,968. The addition of QR merchants has significantly contributed to this growth. These merchants processed 13.6 million transactions worth Rs. 26.7 billion, representing a 7.2 percent increase in volume and a 19.8 percent increase in value year on year.

As of the end of December 2022, there were 5.4 percent more cards in circulation than the previous quarter, totaling 48.6 million cards, with the majority of them being Debit Cards (63.5 percent), Social Welfare Cards (22.8 percent), ATM only Cards (9.9 percent), Credit Cards (3.6 percent), and Prepaid Cards (0.3 percent).

On a quarterly basis, paper-based transactions grew at a slower rate of 3.4 percent in volume and 12.2 percent in value. SBP’s Real-time Inter-Bank Settlement Mechanism (PRISM) processed 1.1 million transactions totaling Rs. 161.3 trillion in the Large-value (wholesale) payments segment, representing a 5.9 percent increase in volume and 1.4 percent increase in value year on year.

M/s Finja and M/s Nayapay, two EMIs, have also increased their presence in the domestic payments landscape. Nontraditional fintechs of this type are poised to benefit from increasing customer digital adoption. As more such players enter the market, the goal of improving financial inclusion will become more tangible. Even before the pandemic, this shift to digitalization was already underway. The pandemic, on the other hand, accelerated this change by sheer force of necessity, and the data shows that this trend is continuing.

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