Online banking users surge 36% to 13.22m

SBP terms increase in transactions through internet, mobile banking channels promising


Salman Siddiqui December 04, 2020
A PTA report says that the ministry of commerce has formulated an ‘e-commerce policy board’ to monitor progress. PHOTO: FILE

The number of registered online banking users in Pakistan surged by 36% to 13.22 million, raising the value of digital financial transactions to over Rs2 trillion amid the Covid-19 pandemic during the quarter ended September 30, 2020 compared to the same quarter of last year.

“The increase in transactions through internet and mobile banking channels has been quite promising,” stated the State Bank of Pakistan (SBP) in its Payment System Review for the first quarter (Jul-Sept) of current fiscal year 2020-21 released on Thursday.

“These channels have provided an easy and round-the-clock alternative to the customers to fulfill their daily financial and banking needs during the Covid-19 pandemic.”

“It is expected that the rising trend will continue in the next quarter as well due to the steps taken by the State Bank of Pakistan to promote digitisation during these difficult times,” it said.

Besides, the number of overall e-banking transactions increased to 253.7 million valuing at around Rs19.12 trillion in the quarter under review compared to 206.5 million transactions worth Rs15.27 trillion during the quarter ended June 2020.

According to the report, the figures showed an increase of around 23% in volume and 25% in value on a quarter-on-quarter basis.

E-banking transactions comprise real-time online branches (RTOBs) transactions, ATM transactions, internet banking transactions, mobile phone banking transactions, e-commerce, point of sales (POS) and call centre/ IVR banking.

Among the total number of e-banking transactions, ATM transactions had the highest share of 53% in the volume of transactions, the central bank said.

“The growth in online payment system is seemingly sustainable,” said information and communication technology (ICT) firm SI Global CEO Noman Said while talking to The Express Tribune. “The credit for tremendous growth in internet banking during Covid-19 goes to the central bank.”

The risk of cybercrime has, however, increased following a significant growth in the number of internet banking users in Pakistan.

“Policymakers at SBP should ensure that banks, especially smaller ones, deploy enough security features to keep online banking users safe from cyberattacks,” he said.

Lately, banks have introduced a number of online products which can be accessed on smartphones.

“To achieve financial inclusion targets, banks should also introduce products for those people who have low-end phones and are financially illiterate,” he said.

Presenting the breakdown of online users, the central bank said that the number of registered mobile phone banking users reached 8.9 million during the first quarter of FY21, showing an increase of 41% over the same quarter of previous fiscal year.

In addition, the number of internet users on bank websites reached 4.3 million with a growth of 26% over the same period.

During the quarter under review, mobile banking transactions increased to 36.4 million and valued at around Rs908.7 billion, marking an increase of 139% in volume and 211% in value when compared with the same period of last year.

Internet banking transactions increased to 18.9 million valuing at Rs1.1 trillion during the quarter, registering a growth of 55% in volume and 89% in value when compared to the same period of last year.

The country’s total transactions - including online and paper-based- increased to 351.8 million with a worth of Rs147.69 trillion during the quarter ended September 30, 2020 compared to 285.7 million transactions worth Rs136.13 trillion in the previous quarter.

According to the central bank, the figures show an increase of 23% in volume and 8% in value on a quarter-on-quarter basis.

Published in The Express Tribune, December 4th, 2020.

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