According to recent figures released by the State Bank of Pakistan (SBP), branchless banking (commonly known as e-banking) has witnessed a healthy trend in the current fiscal year, with e-banking transactions increasing by 16% in volume and 4% in terms of value. E-Banking systems allow customers to make transactions such as funds transfer, bill payments and other services using internet and smartphone/ mobile technologies.
According to SBP, real-time online banking transactions increased PKR 135.4 million by volume and PKR 32.3 trillion by value, indicating a slow but steady adoption.
Digital transactions in the country continue to experience an upward trend as it is easier and accessible compared to the commercial banking systems. Several analysts believe that the rise and proliferation of e-commerce platforms is a major factor contributing to the growth of e-banking transactions nationwide.
Mobile banking in particular has tapped a population of Pakistan which is outside the banking ecosystem of Pakistan. EasyPaisa launched by Telenor (in collaboration with Tameer Micro Finance Bank) offers near instant money transfer and local remittance through an extensive agent network using mobile telephony. In addition, UPayment is another mobile banking platform by Ufone that allows customers to securely perform transactions through USSD (short code messaging).
Moreover, the usage of ATMs and POS terminals has increased to 18% in 2016 from 8% in 2015. The statement issued by bank states, “Payment System infrastructure also showed phenomenal growth during the period under review. The number of branches increased from 11,937 to 13,179 whereas total number of ATMs installed in the country increased from 9,597 to 11,381 during the year.’’
Many consumers now prefer e-commerce banking over commercial banks for regular account inquiries, fund transfers and electronic channels. There’s finally a steady growth in electronic fund transfers and retail payments. Also, we believe that there is an immense growth potential in e-banking space which will help in improving the economic condition of the country. This ties in with SBP advising brick-and-mortar banks to focus on adopting innovative and disruptive practices in order to retain their position in the banking sector in future.