Value of financial transactions jumps to Rs558.8tr

KARACHI: Individuals and the corporate sector in Pakistan collectively conducted 1.22 billion financial transactions worth Rs558.8 trillion through banking channels in the fiscal year ended June 30, 2018, according to the State Bank of Pakistan (SBP) on Wednesday.

In terms of value, paper-based currency continued to dominate the payment system in the country. However, paperless currency exhibited a significant growth in the number of transactions.

Under paperless currency, mobile banking showed the strongest growth while ATMs also remained heavily in the use of common people, the SBP said in its Payment Systems Review Fiscal Year 2017-18.



“In recent years, the payment and settlement systems of the country have been significantly changing on account of State Bank of Pakistan’s efforts to promote digital payments as an alternative to cash payments,” the central bank said in the report.

In the previous fiscal year, the payment system had registered 1.07 billion transactions worth Rs456.2 trillion. Hence, FY18 registered a growth of 13.5% in the number of transactions and 24.5% in the value of transactions on a year-on-year basis.

E-banking channels ie real-time online branches (RTOB), ATMs, e-commerce, internet, mobile phone and call centres/IVR banking collectively processed 756.4 million transactions of the value of Rs47.4 trillion.

The transactions showed significant growth of 20.9% and 27.8% in volume and value respectively compared to the previous year.

The large-value payment system ie Pakistan Real Time Interbank Settlement Mechanism (PRISM) processed 1.7 million transactions amounting to Rs361 trillion. These transactions grew 54.5% and 29.2% in volume and value respectively compared to the previous year.

In these transactions, the ones regarding third-party customers’ transfers has the highest share of 1.3 million transactions (79% of overall recorded transactions) whereas government securities settlement transactions have the highest share of Rs256 trillion in value (71% of overall transactions).

Mobile banking

Mobile phone banking (app-based banking) was being offered by 21 commercial and microfinance banks to 3.4 million registered users as of end-June 2018. This channel processed 21.8 million transactions worth Rs409.8 billion in FY18 and showed year-on-year growth of 195.6% and 189.8% in volume and value respectively.

Intra-bank and inter-bank fund transfers were main contributors to the total mobile phone banking transactions. Intra-bank fund transfers contributed 5.8 million (26.6%) transactions and Rs186.2 billion (45.4%).

Inter-bank fund transfers contributed 5 million (22.9%) transactions and Rs196.4 billion (47.9%).

Utility bill payments had the share of 10.1 million (46.3%) in volume and Rs10.5 billion (2.6%) in value within the overall mobile banking transactions.



ATM transactions

As a core banking touch-point and major enabler for access to funds, ATMs are still playing a significant role in the broad context of modern banking. The wide selection of services including cash withdrawals, funds transfers and utility bill payments have emerged on ATMs in recent years. Despite the availability of a wide range of services on ATMs, cash withdrawals still has the highest volume and value of transactions. The channel leads to reduction in the number of branches.

During FY18, ATMs processed 470.6 million transactions amounting to Rs5.5 trillion with 14,019 ATMs as on June 30, 2018. These transactions showed a year-on-year growth of 18.3% by volume and 21.6% by value.

“During the year under review, the average size of an ATM transaction was approximately Rs11,793 and 33,567 transactions were processed per ATM,” the SBP said.

Published in The Express Tribune, August 9^th, 2018.

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