Retail Payment Systems
In the OIC Member Countries
75
4.6 Pakistan
Highlights:
• Pakistan’s payment systems infrastructure showed growth. The volume of overall e-banking
transactions during October-December 2011 registered an increase of 2.6% to reach 66.96
million. The value of these transactions also grew 4.85% to reach Rs. 6,454 billion as
compared to the preceding quarter (July-September, 2011).
• With e-commerce growing, online payment methods will act as a crucial step in ensuring
adoption to online services once a customer builds trust with a retailer.
• Currently the most used method of payment for online purchases is through cash on delivery
(COD) services, which are available to all e-commerce players by local courier companies
such as TCS, BlueEx, and Leopard.
Introduction
Pakistan continued to face economic challenges as well as energy shortages, environmental
disasters such as floods, and other structural impediments that have held back investment and
economic growth. Its economy grew on average at the rate of 2.9% per year since 2010.
Deterioration in the utilities sector is the main factor in limiting economic growth. Electricity
outages have trimmed annual GDP growth by 2%, which is one third of the level of the
country’s supposed long-term trend potential of about 6.5% per year. The services sector
contributed 57.7% to the GDP and has become the main driver of economic growth as
reflected in its 3.7% growth rate in 2012-13. This performance is mainly driven by the finance
and insurance sector at 6.6%, general government services at 5.6%, as well as housing at 4.0%.
General Banking and Payment Landscape
The State Bank of Pakistan is a central bank established under the State Bank of Pakistan Act in
1956. The other banking companies in Pakistan were established under the Banking
Companies Ordinance in 1962. The State Bank of Pakistan plays a pivotal role for the
establishment and supervision of scheduled banks. The Financial Institutions (Recovery of
Finances) Ordinance, established in 2001, provides the legal structure and procedure for the
recovery of finances. Under the Banking Companies Ordinance 1962, the State Bank of
Pakistan has the right to regulate and supervise all banks operating in the country. As of June
2014, there are 5 public sector commercial banks with 2,022 total branches, 22 local private
banks with 8,388 total branches, 7 foreign banks with 27 branches, and 4 specialised banks
with 547 branches. 22
22 See Statistical Supplement 2014 ).