Pakistan’s economy is mainly cash-based; people send money to Pakistan and abroad by cash, with flourishing black markets and low government revenue. In Pakistan, a modern digital payment system has the potential to change this. The Pakistani government and the State Bank of Pakistan (SBP) collaborated with the Bill and Melinda Gates Foundation to introduce this groundbreaking digital cash transfer scheme. The United Nations, the World Bank, and the United Kingdom provided additional assistance.
What Is The Primary Step Taken By Government Towards Digital Payment System?
Prime Minister Imran Khan unveiled the country’s first instant payment system, Raast, allowing individuals, companies, and government institutions to make an end-to-end online money transfer to Pakistan in real-time.
Speaking at the event, the prime minister described the launch as a significant move forward by the State Bank of Pakistan (SBP) towards a “Digital Pakistan,” noting that it will help low-income groups become more integrated into the economy. He believed it would help a lot in the fight against poverty, particularly in rural areas. Raast is part of Prime Minister Khan’s “Digital Pakistan” initiative, aiming to bring the poor into the formal economy. Not only can the faster payment service be used to settle small-value retail transfers in real-time, but it will also offer affordable and universal access to all financial industry members, including banks and Fintechs.
Merchants, companies, individuals, FinTechs, and government agencies will be able to make a real-time money transfer to Pakistan through the web, cell phones, and agents, as well as government payments such as wages and pensions, according to Reuters. Raast can also be used to make payments for national financial assistance programs such as the Benazir Income Support program and the Ehsaas Emergency Cash Scheme, according to Reuters.
How Raast Initiative Will Help Economy Of The Country?
According to the SBP, digital payments account for just 0.2% of Pakistan’s nearly 100 billion monies from the public, while the share of digital transactions in other peer countries ranges from 1.5 to 7%. The Raast digital payment system would help companies by boosting the digital economy and increasing financial inclusion in the country.
The use of Raast by the Pakistani government and its people allows citizens to collect their pensions, wages, and other government payments much more easily. Small companies and other micro-enterprises benefit from improved productivity and accountability. They can pay manufacturers and distributors immediately rather than paying cash or sending checks via the mail. This makes business operations more effective, dependable, and open and less vulnerable to corruption.
Why Online Money Transfer Is Necessity Of A Country’s Economy?
Access to affordable financial services is essential for poverty reduction, economic development, and crisis resilience, and it paves the way for financial inclusion, particularly for the Pakistani diaspora. Most expatriates still lack access to even the most basic transaction accounts, enabling them to send money to Pakistan online more safely and efficiently. As a result, they will obtain more comprehensive financial services like investments, insurance, and credit.