K-P: cashless economy

With the introduction of the Khyber Pakhtunkhwa Digital Payment Bill 2026, K-P has taken a big step towards becoming Pakistan's first cashless model economy. The proposed law is by no means groundbreaking, with its most notable changes being requiring businesses to accept digital payments and ensuring the prominent display of QR codes at all businesses and public-facing institutions across the province. Given the low bar, we are hopeful that implementation will be quick and painless.

If that first hurdle is cleared quickly, the government will be in a position to add many more related services to the cashless menu, depending on whether the State Bank allows them. It will also have the indirect benefit of eliminating the black and grey economies by making transactions traceable. This will be critical for crafting long-term tax policy and for improving the quality of economic data that policymakers can use to craft better government policies.

However, the path to a cashless society will not be without challenges. Reliable internet connectivity will be critical, and more public digital literacy campaigns are needed to help less tech-savvy people, especially the elderly, feel comfortable using mobile wallets and payment apps. Millions of people are still unbanked or underbanked and would have to be worked into the system, lest they be left out in the cold. Many people also feel more comfortable managing their budgets with cash, and studies have shown that digital transactions may encourage overspending.

It is also notable that eliminating cash is more of a symbolic goal, as even the world leader in cashless transactions, Sweden, still sees about 8% of all transactions conducted in cash. In several other highly developed economies, including the eurozone, cash remains king for a majority of point-of-sale transactions. Even in the US, about half of all adults report using cash at least once a week, and 14% of all transactions are still cash-based.