Islamabad: Pakistan has launched first government-run instant digital payment system to boost financial inclusion and reach the 100 million unbanked population.
Addressing the launch ceremony in Islamabad, Prime Minister Imran Khan said the country’s 220 million-strong population could become an “asset” by boosting their involvement in the formal economy through digitalisation. With these new technologies, the government aims to uplift people, cut poverty and grow the middle class.
The payment system is aimed at shifting away from a cash-based economy and improving financial inclusion which means having access to savings accounts, money transfers, loans and related services to boost the economy. Pakistan has one of the world’s largest unbanked populations of around 100 million adults, according to World Bank data.
Besides offering people easy access to payment, technologies such as Raast would facilitate the transition from the informal to the formal economy and improve the tax to GDP (gross domestic product) ratio in Pakistan, Khan said. The size of Pakistan’s informal economy was estimated to be around 56 per cent of the country’s GDP in 2019. Digital transformation and automation can bring the informal economy into a documented system and ensure proper taxation to finance public goods and services.
Financial inclusion revolution
Raast payment system would bring a “new revolution for financial inclusion in our country” and help people make payments in seconds, said State Bank of Pakistan (SBP) Governor Dr Reza Baqir. “The system is instant and free with no hidden charges and convenient to use,” Baqir said that Raast is part of the national payment strategy of the central bank which is focused on initiatives to increase financial inclusion as instructed by the prime minister.
There are nearly 190 million mobile phone subscribers in Pakistan but only 80 million had bank accounts, Baqir said, adding that SBP’s Raast would help improve banking access to the remaining 100 million people. He also shared that Pakistan witnessed $500 billion e-banking transactions during the last fiscal year, considerably more than the country’s $370 billion GDP.
What is Raast?
The payment system called “Raast” (Urdu word for correct or direct) is an initiative of the SBP to shift the country’s economy from cash to digital. It is an instant payment system that offers digital, easy-to-use and efficient payment options to people. There are a few private digital cash transfer systems, such as JazzCash and Easypaisa, but Raast is the first such government-run service.
Key features
• Easy-to-use, digital and free payment system.
• No minimum transaction size is defined.
• Promote enabling regulatory environment for new players.
• Aims to facilitate individuals, SMEs, businesses, fintechs, government entities.
How to use Raast?
1. Bank customers can sign up for Raast via any of these channels: bank’s mobile application, internet banking or visiting the branch.
2. Once a customer has registered at Raast, anyone can send them money using their mobile phone number (as Raast ID) without the long bank account details.
3. Bank customers can still use the service for sending or receiving funds using their IBANs even if they do not have a Raast ID.
