SBP to use Raast for govt payments | The Express Tribune
Key Takeaways
- The SBP allocated a Rs3.5 billion subsidy program to incentivize merchants to adopt Raast P2M QR code payments.
- The government aims to route 100% of government payments through Raast by the end of the fiscal year 2025-26.
- The subsidy reimburses merchants 0.5% of the transaction value or Rs100, whichever is lower, to ensure minimal adoption cost.
- The primary goal is to reduce Pakistan's reliance on cash (currently over 85% of transactions) and formalize the undocumented economy.
- Merchant adoption of Raast remains low due to transaction fees, limited awareness, and fear of tax exposure among small businesses.
The State Bank of Pakistan (SBP) announced a significant Rs3.5 billion subsidy program aimed at encouraging merchants to adopt Raast, the country's official instant digital payment system, by effectively making person-to-merchant (P2M) QR code transactions nearly cost-free for a specified period. Concurrently, the SBP has set an aggressive target to ensure all government payments are processed through Raast by the close of the 2025-26 fiscal year, signaling a major push for digitalization. The move addresses the low merchant adoption rate for Raast, which struggles against Pakistan's deeply entrenched cash culture, where over 85% of transactions remain informal. Experts note that bringing even a fraction of the trillions circulating in cash back into the banking system would benefit the entire financial ecosystem and help curb the undocumented economy. Challenges remain, including merchant resistance to fees, preference for free P2P transfers, and trust deficits related to tax exposure, necessitating collaborative efforts from banks, fintechs, and regulators to achieve national-scale adoption and 'win the war against cash.'
