Pakistan’s First Digital Payment Gateway System “Raast”

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Pandemic accelerates digital payments

In terms of both volume and transactions, digital payments have grown significantly over the past six months. A senior official of a telecom company remarked that access to digital payments was essential to lay the foundation for a digital Pakistan.


Telenor Pakistan CEO, Irfan Wahab Khan told that we have seen an increase in the tendency of most people to use digital channels and activate mobile wallets. Increasing attractiveness and the pull factor alone highlight the convenience and efficiency. He also told that “we’ve seen a trend where early adopters and youth are mainly involved in online shopping and digital payments”. But it’s not limited to them.


Highlighting the prospects for the future, Khan said, we see that digital payments will continue to be attractive in Pakistan and will continue to be a major trend.


The future of digital banking


We’ve seen digital acceleration during the epidemic, a leap in the adoption of digital services, and a growing reliance on digital ecosystems, the CEO said. Although not everyone has access to these services, the government Highlights the need to cooperate. So that the benefits of digital technologies can be extended to as many people as possible.


The CEO was of the view that the lessons and learning experience gained during the pandemic should be carried forward. The development of the digital aspect of our lives is important not only in special conditions such as pandemics. But it is also important for the development of modern society.


Digital has become one of the most used words these days. Now everything is pre-connected to ‘digital’, and digital banking is no exception. With the advent of Covid-19, articles claiming to be turning a corner in the “digital financial revolution” and Pakistan’s dormant commercial banking sector were seen in abundance.


SBP (State bank of Pakistan) introducing a world-class system


The State Bank of Pakistan (SBP) has introduced a world-class payment system called ‘Raast’. It will be a big step in the digitization of the country’s financial mechanism.

Sima Kamil (Deputy Governor of SBP) announced the development of a new payment system while talking to a private media outlet. She told that From 11 January 2021 onwards, the central bank will start a new payment system called ‘Raast’. We think this a good way forward for the country.

Kamil said, despite the availability of 160 million mobile phones, our digital economic participation is very limited. Many people rely on cash to pay. Under the new system, the central bank aims to reduce the amount of cash-based transactions, she said. As the existing system creates a number of social problems.


Sima Kamil said that in the first phase instant credit of dividends from listed companies to shareholders will be initiated. In the next phase, that will take a few months for the payment system to digitalize payments to wages and pensions for government employees, making it faster, freer and safer.

Scope of the “Raast” payment system

Pakistan First Digital Payment Gateway System Raast by SBP [youngstars.pk]

The Governor of the state bank of Pakistan Raza Baqir told about the forum on the important developments. He said that significant progress has been made in the development of Pakistan’s Instant Payments System project powered by SBP in collaboration with its partner.

The Prime Minister of Pakistan Imran Khan will soon begin the completion of its first phase. From this phase, the profit payments will be immediately transferred to the investors’ bank accounts through the Central Depository Company.
Talking about the scope of the “Raast” payment system, Sima Kamil said that in the next phase, the payment system will digitize BISP and Ehsan payments by June. She told that nearly 3 million women will benefit from this system. She informed the upcoming payment system has been applied in advanced countries such as UK and Australia. After June ‘Person to Person’ payments will begin, she said. By December, a common man could make payments through QR codes.

Why there is need of “Raast” payment system?

Due to some reasons including low banking penetration, lack of trust and awareness of digital payment methods, limited interoperability, difficult access, and high transaction cost, Pakistan has low electronic transactions. Real-Time Gross Settlement is a System in Pakistan which only offers high value and instantaneous payment settlements for corporate transactions.
Raast will be Pakistan‘s instant payment system. It will facilitate retail payments with great efficiency.

Today, digital payments account for only 0.2% of Pakistan’s ~100 billion transactions, while the share of digital transactions in peer countries ranges from 1.5% to 7%. This can be mainly attributed to the challenges within the payment ecosystem. It includes:

Limited interoperability:

Financial institutions (i.e, digital payment service providers) find it tough to connect to each other due to a shortage of central resources.


The high cost of digital payments to the end-user:

End users are charged higher fees for digital transfer of money, making digital payments inaccessible to a large segment of the population.


Poor user experience:

End-users have to go through a complex process to make digital payments and there are no digital payment methods that are widely accepted by merchants.

Shortage of security:

Currently available digital payment types and infrastructure do not offer adequate data protection and authentication.


Features of Raast


Instant Payment:

Real-time digital payments to individuals, merchants, businesses, and government agencies

Low-to-no transaction costs for end-users:

Raast is created to manage at a cost-recovery model in order to make digital payments affordable to end-users of all socio-economic backgrounds.

Full sector-wide interoperability:

Raast will allow all financial institutions to connect to each other seamlessly through a single link to the central infrastructure. It will make digital payments accessible across any channel to customers of any financial institution.

Customer-centric innovative products/services:

Raast will be based on the latest standards. It will enable financial institutions to build innovative and user-friendly digital payment products and services (e.g. payment through phone number/email).

Reliability and enhanced security:

Raast will introduce more secure modes of payment, ensure that each transaction is authorized by the payer, and offer data protection and fraud detection services.

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