Online banking is gaining momentum



A silent digital payment revolution is underway in Pakistan as the number of mobile and internet banking users and e-commerce transactions showed a strong growth trend in the quarter ended March 31, 2021.

Surprisingly, the number of financial transactions in cash and other forms of paper-based transactions (in terms of volume), as well as the number of physical bank branches, recorded a decline in the quarter under review, confirming that the payment system online is gaining ground. traction and will change the banking landscape in the country, according to Pakistan’s central bank on Monday.

“Commercial banks in Pakistan are expanding their digital infrastructure to support electronic payments, which are complemented by enabling policies of the State Bank of Pakistan (SBP),” the central bank said in its quarterly review of the system. payment (QPSR) for the third quarter of March) of the current fiscal year 2020-2021.

The number of Internet and mobile banking users has grown significantly in recent quarters. Internet banking users increased by 10% to 4.98 million in the quarter under review compared to the previous quarter and by 30% compared to the same quarter last year.

Likewise, mobile banking users grew 5% quarter-on-quarter to 9.86 million and 20% from the same quarter a year earlier.

Read more: RDAs to be converted into a digital bank

E-merchants have also been on the rise in recent quarters. E-commerce merchants rose 5% to 2,523 in the January-March 2021 quarter from the previous quarter, as they grew a staggering 62% from the same quarter of the year last.

“The numbers can lead us to believe that consumers are realizing the benefits of digital payment channels in our daily lives. This complements the increase in consumer confidence in the use of digital channels, ”said the SBP.

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There are 16,223 bank branches reported by microfinance banks / banks (MFBs), of which 107 are overseas branches. All branches except 35 offer online banking services to their customers.

“We have observed a decline in the number of branches, showing that the industry is slowly realizing the benefits of digital payment infrastructure that digital channels bring to the overall consumer experience and its impact on bottom lines,” the bank said. central.

The number of financial transactions via e-banking (including mobile, internet and e-commerce) increased by 4% to reach 309.5 million during the quarter under review, compared to 296.7 million in the previous quarter ended in December 2020.

The value of online banking transactions increased 5% to Rs 22,480 billion in the January to March 2021 quarter, from Rs 21,470 billion in the previous quarter.

Other e-banking payment methods include real-time online branches (RTOBs), ATMs (ATMs), points of sale (points of sale) and call centers. “ATMs processed the majority of the bulk of transactions with 49% of transactions (volume in online banking). “

Traders processed approximately 5.6 million transactions worth Rs 15.3 billion during the quarter under review. The number of paper-based financial transactions fell 4% to 100.2 million in the January-March 2021 quarter, from 104.8 million in the previous quarter.

However, the value of paper money-based transactions rose 1% to Rs 37.7 trillion in the January to March quarter, from Rs 37,200 billion in the previous quarter ended December 31, 2020.

Despite the availability of other banking facilities at ATMs, the machines are still mainly used for cash withdrawals in the country. “In total, cash withdrawal through ATMs has the highest share of 96% by volume (among other ATM services like paying utility bills and transferring funds through machines) . “

By the end of the quarter, the industry had deployed 16,175 ATMs nationwide, an increase of 134 ATMs. This means, on average, that the banking industry has deployed around 1.5 ATMs per day.

During the quarter under review, the industry deployed more than 4,000 point-of-sale machines, which reached a record high of 67,099.

According to the latest quarterly payment report, the total number of bank accounts has grown to 62 million, with the country’s population growing to 211.93 million.

The value of the currency in circulation stood at 6.86 trillion rupees as of March 31, 2021.

As of March 31, 2021, the total number of payment cards issued in Pakistan increased to 44.5 million, from 44.2 million in the previous quarter. Almost 64% of those cards are debit cards, 4% are credit cards, 17% are welfare cards and 15% are ATM cards, according to the report.

The banking sector as a whole saw a 2% growth in the number of financial transactions of all types to 410.8 million, while the value of these transactions jumped 10% to 169.5 trillion rupees in the quarter under revised compared to the previous quarter.

Posted in The Express Tribune, June 29e, 2021.

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