E-banking transactions up in value and volume

Volume of paper-based transactions goes down, value still up in 2014-15

KARACHI/ CREATIVE: NABEEL AHMED:

The volume of paper-based transactions recorded a year-on-year decrease of 0.12% to 361.56 million in 2014-15 while e-banking transactions witnessed a growth rate of 16% over the same period.

According to the Payment Systems Review released by the State Bank of Pakistan (SBP) on Wednesday, the value of paper-based transactions in 2014-15 increased 10% to Rs127.16 trillion. In contrast, the value of e-banking transactions increased 6% compared to 2013-14.

DESIGN: NABEEL AHMED

Paper-based transactions are approximately 34% of total retail payments. The SBP encourages the banking industry to promote the transformation of manual/paper-based transactions to electronic payments and also to automate back-office functions of banking institutions.

Over the past five years, e-banking transactions have witnessed a phenomenal growth, according to the SBP. The volume of e-banking transactions has increased by 100% from 235 million to about 470 million over the last five years while the value of e-banking transactions has surged 62% from Rs22.1 trillion in 2010-11 to Rs35.8 trillion in 2014-15.

The volume of ATM transactions in 2014-15 reached almost 300 million and amounted to Rs3.2 trillion in value. Compared to 2013-14, the year-on-year change reflects a growth rate of 16% in volume and 21% in value.

Cash withdrawal is the major contributor in this increase of ATM transactions over the year, as it contributed around 96% in volume and 83% in value.  ATM transactions are 11% of the total retail electronic payments for 2014-15.

Cash withdrawal through ATMs has increased 16% in terms of volume to 288.9 million while the value has increased 23% to Rs2.6 trillion in 2014-15. Utility bill payments have shown a significant increase both in volume and value. Its volume increased 39% to 0.87 million while its value went up 79% to Rs2.9 million in 2014-15.

DESIGN: NABEEL AHMED

According to the SBP, the increasing operational cost creates impediments for banks in investing in their payment infrastructure. Performance issues in the area of ATM services, such as frequent cash outages, network and power availability issues, cost of alternate energy sources and problems in cash supply chain management, also result in inefficiencies, it said.

“Obsolescence of payment systems and channels and cyber security threats, law and order situation and issues in vendor support while 24/7/365 availability demand from general consumers are challenges for the industry,” it said.

Published in The Express Tribune, September 3^rd, 2015.

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