ISLAMABAD: Digital channels accounted for 92% of Pakistan’s total retail payments during the second quarter of fiscal year 2025–26, underscoring a continued shift toward electronic transactions, according to a report by Wealth Pakistan.
The Payment Systems Quarterly Review for Q2 FY26 shows that out of 3.4 billion retail transactions recorded during the period, approximately 3.1 billion were conducted through digital platforms. These include mobile banking apps, internet banking, ATMs, point-of-sale (POS) systems, e-commerce platforms, and call or IVR-based banking services.
Digital payments expand in volume and value
The report highlights that only 8% of transactions were carried out through over-the-counter (OTC) channels such as bank branches and branchless banking agents. In absolute terms, OTC transactions stood at around 272 million, compared to the significantly higher digital volume.
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In value terms, digital payments also recorded strong growth. Transactions through digital channels reached Rs64 trillion during the quarter, up from Rs56 trillion in the previous quarter, marking a 14% increase. Overall retail transaction value stood at Rs167 trillion during the same period.
Growing use across financial activities
Digital platforms are increasingly being used for a wide range of financial activities, including fund transfers, bill payments, merchant transactions, and online shopping. The expansion of mobile and internet banking services, along with improved connectivity, has contributed to the rising adoption.
Banks, microfinance institutions, and electronic money providers have expanded their digital services, enabling customers to carry out transactions without visiting physical branches. These systems are integrated with various payment tools, allowing users to transact with individuals, businesses, and government entities.
Infrastructure and ecosystem support growth
The increasing use of ATMs and POS machines continues to support both card-based and account-based payments, while e-commerce platforms and online payment gateways are facilitating higher volumes of digital purchases.
Despite this growth, OTC channels remain relevant, particularly in areas with limited access to digital infrastructure. Bank branches and agent networks continue to support services such as cash withdrawals, deposits, and certain transfers.
Shift toward a digital-first payment system
The report attributes the growth in digital transactions to ongoing improvements in payment infrastructure and wider availability of digital platforms. The data indicates that electronic channels are becoming the primary mode of financial transactions across different sectors of the economy.
The findings for Q2 FY26 highlight a broader transition in Pakistan’s financial landscape, with digital payments now dominating retail transactions and reducing reliance on cash-based systems.
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