ISLAMABAD – In a first Pakistan unveils new strategy to attract $263billion, which would raise GDP to 7% and create 4 million new jobs.
State Bank of Pakistan has rolled out the National Payments System Strategyaimed at boosting Pakistan’s GDP growth to 7% and creating 4 million jobsin the country thanks to customers migrating to electronic payment systems.
Governor State Bank of Pakistan (SBP) Dr. Reza Baqir launched the NationalPayment Systems Strategy (NPSS) in an event at its headquarters in Karachi.
President of the World Bank, David Robert Malpass was the chief guest atthe event that was attended by key stakeholders including regulators,government entities, banks, telcos, Electronic Money Institutions (EMIs),Payment System Operators (PSOs) and Payment Service Providers (PSPs) andother Fintechs.
The governor highlighted the benefits of the National Payments Systemsaying,
This strategy lays out a road map and action plan for Pakistan to have amodern and robust digital payments network.
The strategy claims to attract $263 billion in new deposits with apotential market of $36 billion by 2025.
The objectives of the National Payments System Strategy are to makerecommendations to design a National Payments System complying withinternational standards and best practices, tailored for specificcircumstances and providing a safe, efficient and inclusive payment systemin Pakistan. Migration to efficient electronic payments stimulatesconsumption and trade, benefiting the economy.
The strategy for Pakistan’s National Payment System is based on applicableinternational standards, particularly the CPMI-IOSCO PFMIs, as well as theanalytical framework defined by the CPMI-World Bank for Payment Aspects ofFinancial Inclusions (PAFI).
It addresses a wide range of topics covering the entire National PaymentsSystem: the critical foundations, including the Legal and RegulatoryFramework and the NPS Infrastructure. The strategy then continues with thecharacteristics of Pakistan’s Retail Payments Market, the issues of accountand payment product design, and access points.
Oversight of the National Payment System is specifically identified as akey area of focus and a pivotal responsibility of the Central Bank.Finally, large-volume recurrent payment streams are identified andrecommendations on how to leverage them are provided, starting withgovernment payments and ending with national and international remittances.
The existing impediments revolve around the lack of the infrastructureneeded to keep up with the widespread use of electronic payments,particularly for large volume payments (e.g. government payments).Specifically, by expanding the market and the legal/regulatory environment,approximately 69.3 million adults can be provided with transactionaccounts, while an additional 9.2 million adults can obtain access totransaction accounts through the implementation of a financial inclusionstrategy in Pakistan.
By digitizing G2P cash transfers, as much as 3.4 million adults can becomerecipients of electronic payments. On the demand side, there is a hugediscrepancy between the fast pace at which financial inclusion has beenprogressing in other similar countries and the slower pace at which it hasbeen progressing in Pakistan.
The effective protection of customers and the existence of a competitiveenvironment are also being considered as important objectives by manycentral banks. Central banks typically seek efficiency and safety in theNational Payments System (NPS), including retail payment systems, services,and payment instruments.