SBP Approves Pilot Operations for Digital Payment Providers in Pakistan

In recent years, the landscape of financial transactions in Pakistan has undergone a significant transformation, primarily driven by the rapid adoption of digital payment solutions. The State Bank of Pakistan (SBP) has been at the forefront of this evolution, implementing policies that encourage the growth of electronic money and digital payment systems. This shift is not just a trend; it represents a fundamental change in how people conduct financial transactions, making them faster, safer, and more accessible.

Recently, the SBP took a notable step by granting in-principle approvals to two companies, Toko Lab Private Limited and Accept Technologies Private Limited (operating as PayMob). These approvals allow Toko Lab to establish itself as an Electronic Money Institution (EMI) and PayMob to function as a Payment System Operator (PSO) and Payment Service Provider (PSP). Both companies have been given a six-month window to develop the necessary infrastructure and operational capabilities before they can apply for permission to start pilot operations. This move is expected to enhance competition in the digital payment sector, ultimately benefiting consumers.

Moreover, HubPay Private Limited has also been allowed to commence its pilot phase as an EMI, indicating that the SBP recognizes its readiness to contribute to the digital payment ecosystem. Currently, there are four fully operational EMIs in Pakistan: NayaPay, Finja, SadaPay, and Akhtar Fuiou Technologies. Additionally, three other EMIs—Wemsol, E-Processing System, and HubPay—are in the pilot stage, showcasing a growing interest in digital financial services.

The SBP's recent approvals have increased the total number of in-principle authorized EMIs to three, which now includes YAP, Cerisma, and Toko Lab. This expansion is a clear indication of the SBP's commitment to fostering a robust digital payment environment in Pakistan.

As of September 30, 2024, the growth in digital transactions has been remarkable. The number of e-wallets surged by 76.5% year-on-year, reaching 4.2 million, while payment cards increased by 41.4% to 4.6 million. E-money deposits also saw a significant rise, reaching PKR 5.7 billion, which marks an impressive 87.5% year-on-year increase. From January to September 2024, a staggering 82.1 million e-wallet transactions were recorded, valued at PKR 231.9 billion. This reflects a growth rate of 117% in transaction count and an astonishing 163% in value compared to the same period last year.

These developments highlight the increasing importance of digital financial services in Pakistan's economy. The SBP's efforts to expand financial inclusion through secure and innovative payment solutions are commendable. As more people embrace digital payments, it is crucial for the SBP and other stakeholders to ensure that these services remain accessible, secure, and user-friendly. The future of financial transactions in Pakistan looks promising, and with continued support and innovation, the country can achieve greater financial inclusion for all its citizens.