Pakistan launches country’s first instant payment system for P2P transactions

KARACHI: Pakistani Prime Minister Imran Khan on Tuesday launched Raast, a digital payment system for instant person-to-person (P2P) transactions, in a push to enhance the share of the formal economy and increase financial inclusion.
Pakistan has the third largest unbanked adult population globally with about 100 million adults without a bank account, according to the World Bank. Phone-based banking has proven a hit among the poor in other emerging markets such as China, India and Kenya. Those efforts have been driven by private sector companies that offer user-friendly, affordable apps.
Whether Pakistan’s state system will prove as nimble and easy to use remains to be seen. And it will initially require help from the very same banks that for decades have shut out low-income Pakistanis with pricey fees.
Raast is Pakistan’s first instant payment system that enables end-to-end digital payments among individuals, businesses and government entities. The state-of-the-art Faster Payment System will be used to settle small-value retail payments in real time while at the same time provide cheap and universal access to all players in the financial industry including commercial and microfinance banks, government entities and fintechs, according to State Bank of Pakistan.
“The Raast initiative is to facilitate the common man to avail banking services through mobile phones,” PM Khan said at the launching ceremony in Islamabad. “It would create ease for the common man, especially those who were afraid of going to banks and it would also cut their cost of payments.”
The premier said the country’s 220 million population could be a great asset if brought into the formal economy through digital means. If the country did not take advantage of technological advancements, the majority of the population would become a burden, he added. 
“Pakistan has one of the lowest saving rates in the world. The utilization of our banking system is low, this results in a low tax-to-GDP ratio,” PM Khan said. “The initiative will improve our saving rates because countries prosper only when the saving rates are improved.”
Central bank governor Dr. Reza Baqir said the initiative had been launched on the directives of the prime minister to ensure maximum financial inclusion.
“Raast person-to-person payment system will bring revolution in the country for financial inclusion by making it easier for people make transactions with each other,” Baqir said. 
Explaining the four main features of the new system, the governor said: “The payment would be made in seconds, secondly there would be no banking fee, thirdly, mobile phone number would be their Raast ID number, and it would be linked to their bank accounts.”
The governor said due to measures taken to promote digital banking in Pakistan, the volume of e-banking transactions had increased to $500 billion during the last fiscal year “which is more than our $370 billion GDP.”
“Each year our e-banking transactions are surging by 30 percent,” he added.