Page 87 - CMA Journal (Nov-Dec 2025)

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Card Payments

Card based payments and e commerce
channels continue to expand steadily.
The total number of plastic cards has
reached 57.4 million, including 89%
debit cards, 7% social welfare cards, and
only 4% credit cards. This distribution
reflects Pakistan’s prudent approach to
consumer spending pattern and
reflects that due to avoidance of
interest and high charges on credit
cards most consumers still prefer to use their own funds
Challenges and Opportunities
instead of borrowed credit.
The global banking industry dynamics are rapidly
E Commerce and QR Payments
changing in the backdrop of technological
Globally e commerce has played a vital role by advancements in the area of data analytics, machine
streamlining the supply chain and reducing the learning, rise of fintech, AI integration, hyper
transaction cost. In the local context of Pakistan, we have customization and cross border payment integration.
witnessed a robust activity with 213 million online These advancements on one hand are increasing
transactions, a 40% increase in volume and a 34% rise in pressure on the financial institutions while on the other
value to Rs. 258 billion. However, it is important to note hand they are making things easier and more
that in Pakistan 94% of the e commerce transactions personalized for end consumers.
were conducted via wallets or bank accounts rather than
Despite such progress, for Pakistan there are still specific
cards, a similar adoption pattern as witnessed in mobile
challenges that remain constant. These challenges
first markets such as Indonesia and Kenya.
include lower digital literacy, unreliable internet
It is positive to note that SBP’s efforts to onboard small connectivity, and concerns over cybersecurity and
merchants have been effective, with over 778,000 retail scams. To tackle these challenges, policymakers should
and Kiryana stores now accepting digital payments via implement a nationwide financial literacy program.
QR codes and wallets. Last quarter, these merchants Moreover, due to interest-based offering by many
processed 22 million payments worth Rs. 61 billion, financial institutions, due to religious misalignment
showing increased grassroots adoption of digital many retail and small merchants are shying away from
finance. POS terminals increased to 179,383, enabling 99 adoption of digital solutions by conventional players
million transactions worth Rs. 550 billion. Although POS and looking for Islamic alternatives.
penetration in Pakistan is lower than in regional peers
Promoting public private partnerships, adopting efficient
such as Malaysia and Turkey, the 8% quarterly growth
policies, and advancing digital literacy in Pakistan can
indicates strong potential.
sustain the momentum. Pakistan has the potential to
Large Value Settlements emerge as a leading regional center for digital finance by
encouraging more fintechs and building alliances
Pakistan Real time Interbank Settlement Mechanism
between incubators and fintech startups.
(PRISM) processed Rs. 347 trillion in large value
transactions over 1.5 million transactions. Most of the Focusing more on tech innovation, Shariah compliant
transaction volume comes from customer-initiated digital products, and investing in interoperability and
payments, while government securities settlements cybersecurity, Pakistan can be positioned and become a
make up most of the transaction value. regional leader in digital financial services in Pakistan
and around the globe.
As the market behaviors change, more people are
moving towards the digital payment system. However,
About the Author: Ahmed Ali Siddiqui is the Founding Director of
given the nature of cash-based communities branches IBA Centre for Excellence in Islamic Finance and Group Head
and branchless agents are still essential, handling 238 Consumer Finance, Meezan Bank Limited, with Rabia Manahil,
million transactions worth Rs. 116 trillion. They are Analyst, Shariah Compliance, Meezan Bank Limited, as co-author.
providing key services like transfer of funds, bill
payments, and cheque settlements.

ICMA’s Chartered Management Accountant, Nov-Dec 2025 85