The numbers look phenomenal on paper. But zoom in on any busy bazaar in Lahore’s Anarkali, a roadside dhaba in Faisalabad, or a neighbourhood kiryana store in Karachi’s Orangi Town, and the picture gets a lot more complicated.
Pakistan’s Digital Payments Milestone
Pakistan has reached a digital payments milestone that would have seemed unlikely five years ago. According to the State Bank of Pakistan’s latest Quarterly Payment Systems Review for Q3 FY26 (January–March 2026), total retail payments through formal banking and payment channels reached 3.7 billion transactions worth Rs168.8 trillion during the quarter, a 9% increase in volume compared to the previous quarter.
Of those 3.7 billion retail transactions, 3.4 billion or 92%, were conducted through digital payment channels such as mobile apps, internet banking, ATMs, POS terminals, and e-commerce platforms. And of those 3.4 billion digital transactions, 78% were conducted specifically through mobile banking apps and e-money wallets, representing 2.89 billion transactions worth Rs41.67 trillion. The two figures are measuring different slices of the same data: 92% tells you how much of retail has gone digital; 78% tells you that within digital, mobile apps dominate overwhelmingly.
That 92% digital share is not creeping upward slowly. It has moved from 88% in Q2 FY25 to 92% now, a shift substantial enough that the infrastructure meant to support it is already showing strain at the edges.
Before celebrating the headline numbers, it is worth being precise about what “digital” actually means in SBP’s reporting. The classification is based on the payment channel, not whether the final exchange happens electronically. ATM withdrawals count as digital transactions even though the customer ultimately walks away with physical cash and spends it at a stall with no card machine. Pakistan’s cash-heavy retail economy remains resilient, and that distinction matters when interpreting these figures.
Mobile Apps at the Centre of Everyday Financial Life
What is unambiguously impressive is how deeply mobile apps have embedded themselves into everyday financial life. Those 2.89 billion app-based transactions covered fund transfers, bill payments, merchant payments, and a growing range of other services, all from a phone screen.
By March 2026, mobile banking and digital wallet registrations had exceeded 132 million, up 37% from 96 million a year earlier. Of Pakistan’s 268 million bank accounts (as of December 2025), approximately 49% are now linked to a mobile banking app or digital wallet. A decade ago, formal banking penetration was in the low twenties. That shift is real, significant, and worth acknowledging.
Two platforms have been the most visible drivers of this adoption:
- JazzCash reported a gross transaction value of Rs9.5 trillion in 2024, alongside 19.7 million monthly active users and a retail network of 350,000 active merchants.
- Easypaisa processed 2.7 to 2.8 billion transactions in 2024, with a transaction value of approximately Rs9.5 trillion, roughly 9% of Pakistan’s GDP, making it one of the country’s largest financial platforms by volume. It also became Pakistan’s first licensed digital retail bank in January 2025.
Raast: The Infrastructure Powering Real-Time Payments
Underpinning all of this is Raast, the SBP-built instant payment system that has become one of the most important layers of Pakistan’s real-time payment infrastructure. During Q3 FY26, Raast processed 742 million transactions totalling Rs23.27 trillion. Person-to-Person (P2P) transactions reached 664 million worth Rs18.88 trillion, up from 603 million the previous quarter, a 10% quarterly increase.
The Raast Person-to-Merchant segment, most directly connected to everyday commerce, grew significantly: P2M transactions jumped from 36.3 million to 55.9 million in a single quarter, with over 2.6 million merchants onboarded on Raast P2M by quarter-end.
QR-based merchant payments also showed strong momentum, with transactions reaching 87.3 million, a 41% quarterly increase in volume and a 63% increase in value, reaching Rs0.5 trillion. Across the country, 2.5 million QR-enabled merchant locations have now been registered with banks and branchless banking providers.
The Merchant Gap Nobody Talks About
Here is the tension the headline number does not tell you: the consumer side has moved fast, but the merchant side, especially at the small and informal business end, has not kept pace.
Consider what the infrastructure picture actually looks like on the ground. As of March 2026, Pakistan had 247,836 POS machines spread across 217,042 registered POS merchants. In a country of 240 million people, with industry estimates suggesting three to five million active merchant locations, the coverage math simply does not hold up.
For a small shopkeeper handling hundreds of small-value transactions every day, accepting digital payments is not just a technology decision, it is an economic one. A percentage cut on every transaction, a failed payment during peak hours, or a settlement that takes longer than expected directly affects daily cash flow in ways that make cash the safer, simpler choice.
The deterrents merchants most commonly cite are high transaction fees, unreliable network connectivity, and lack of digital literacy. This is not irrational resistance to technology. It is a perfectly reasonable economic calculation.
The result is a persistent cash culture because the digital payment loop still breaks at the merchant level. The consumer has a functioning app. The payment rails exist. But the last mile, where goods actually change hands, is still frequently offline.
This fragility has real costs. According to a report by Top10VPN.com, Pakistan experienced 9,735 hours of internet disruptions in 2024, with economic losses estimated at $1.62 billion, the highest in the world that year, and a reminder that even the most capable payment rails are only as reliable as the network beneath them. Every outage is another moment where a merchant falls back on cash and a consumer’s digital habit gets interrupted.
What the E-Commerce Numbers Signal
The e-commerce slice of this picture carries a specific signal for anyone building in Pakistan’s digital economy. During Q3 FY26, 434.5 million online purchases worth Rs0.47 trillion were conducted through account and wallet-based payment channels, a category growing fast enough to account for a meaningful share of digital commerce.
Card-based e-commerce transactions, by contrast, totalled 16.4 million, a fraction of the account and wallet-based volume. This is partly because of interchange fees that get passed on to consumers, and partly because Pakistan’s digital consumer has grown up financially through wallets and account-based transfers rather than through traditional credit card culture.
This suggests Pakistan may not follow the same card-first path seen in developed markets. Wallets and account-to-account payments look increasingly like the country’s default digital commerce layer, and startups building checkout experiences primarily around card rails may be optimising for payment behaviour that does not match the majority of Pakistani digital consumers.
The Gap Is Still at the Register
Account ownership and active participation in a digital economy are two different things. Having a wallet that you use to receive a remittance and immediately cash out is not the same as being meaningfully woven into a functioning digital commerce ecosystem.
Pakistan’s next payments chapter is not about getting more consumers onto apps, that battle is no longer the primary challenge. The next billion digital transactions will not come from convincing consumers to download another wallet. They will come from making every small merchant comfortable accepting the payments those wallets already enable. That means closing the merchant gap, fixing the connectivity fragility, and making digital payments the path of least resistance at the actual point of sale, not just in the aggregate statistics.
The consumers have arrived. The rails exist. The gap is standing right behind the cash register.
