Summary: Pakistan’s financial services industry is experiencing a significant digital transformation, with rapid growth in online users and transaction volumes across mobile banking and branchless wallets. Despite lingering user experience concerns, data for FY25 reveals an undeniable surge in digital payments, pushing the country’s retail digitisation to record levels and signaling a pivotal shift in consumer behavior.
Unpacking Digitalisation in Pakistan’s Financial Services Industry
Digitalisation in Pakistan’s financial services industry is experiencing a remarkable surge, contradicting anecdotal perceptions of customer dissatisfaction regarding user experience in areas like onboarding and dispute resolution. Official data from FY25 paints a clear picture of an “unassailable uptake,” demonstrating a robust growth trajectory across various digital payment channels.
As of FY25, Pakistan boasts over 123 million registered digital platform users spanning mobile, internet, and branchless banking wallets. This figure represents more than half of all registered deposit-taking accounts nationwide, a significant achievement for a country that previously ranked low in global digital adoption metrics. This expansion underscores a fundamental shift in how Pakistanis engage with financial services.
Explosive Growth in Digital Transactions
The usage of digital platforms has been particularly explosive. Mobile banking alone processed a throughput of Rs 83.2 trillion in FY25, marking an 80 percent increase over the previous year. Crucially, it facilitated 1.8 billion transactions during this period, surpassing the combined volumes of ATMs, internet banking, point-of-sale (POS), and e-commerce.
Branchless wallets have emerged as an even larger driver of transaction volumes within the financial services industry, recording 4.2 billion transactions worth Rs 14.2 trillion in FY25. Internet banking, while a distant second, also saw its throughput jump by 62 percent to Rs 38.1 trillion, with volumes rising 24 percent to 276.5 million. The growth signifies a broadening digital footprint.
Expanding Infrastructure and Digitalisation
The point-of-sale (POS) channel, one of the country’s oldest digital avenues, recorded a throughput of Rs 2.1 trillion in FY25, up 37 percent year-on-year, with volumes reaching 377.7 million. This expansion was supported by a notable increase in digital infrastructure, with payment cards hitting 59.3 million and the number of terminals reaching 195,849 across 159,284 merchants. This underpins the expanding reach of digitalisation.
While card-based e-commerce transactions also grew to 51.8 million in FY25 (up 30 percent) with a throughput of Rs 249.7 billion, branchless wallets demonstrated their critical role by processing a more impressive 683.9 million online merchant transactions valued at Rs 662.7 billion. The dominance of account-based payments in Pakistan’s mix explains this disparity, as reported by SindhNews.com.
The Context of Digital Progress
Contextualizing this rapid growth, independent analyses show considerable progress. According to Data Darbar’s methodology, approximately 60.8 percent of retail scheduled banking transaction volumes were conducted through digital channels in FY25, up from 52.5 percent. More significantly, digital channels accounted for 21.7 percent of the retail throughput through scheduled banks in FY25, a substantial 8.21 percentage point increase from the previous year.
This surge in digitalisation presents both opportunities and challenges. While consumer-facing digital payments are flourishing, accelerating momentum, especially in business-to-business (B2B) payments, requires sustained efforts beyond central banks and regulated entities, involving tax authorities as well. The progress in Pakistan’s financial services industry heralds a transformative era.
Conclusion
The undeniable growth in digital payment uptake underscores a profound and transformative phase for Pakistan’s financial services industry. Despite ongoing user experience challenges, the statistics unequivocally demonstrate a strong public embrace of digital platforms. Continued strategic efforts are now crucial to capitalize on this momentum, particularly in broader B2B digitisation, setting the stage for Pakistan’s continued financial evolution.