Retail Payment Systems
In the OIC Member Countries
78
ATMs
The introduction of the ATMs and credit cards was done by foreign banks in the mid-1990s
and followed by the domestic banks in late 1990s. MCB Bank Ltd. and Royal Bank of Scotland
Group Plc.24 was a pioneer when it introduced ATMs as well as credit cards at that time.
Subsequently, almost all commercial banks have issued both credit and debit card to their
customers. They also have installed their own ATM network and have linked one of the two
operating ATM switch networks, Mnet and 1-Link.25
As large numbers of people rely on ATMs for cash withdrawals especially during festive
occasions like Eid, SBP has been focusing on improving the availability of ATM related services
in the country. Specific instructions and guidelines have been issued to commercial banks from
time to time to ensure maximum availability of ATM services around the clock and their
performance is continuously being monitored by oversight desks.
Despite its huge numbers of transactions and customer usage, there is very little ATM network
growth. Initial cost and investment has become the most detrimental factor contributing to
ATM network stagnation. Policy makers have shown concern about this because of the need to
move toward greater interconnection.
Debit and Credit Cards
In the composition of plastic cards, debit cards have the highest percentage share of over
90.6% followed by credit cards with 5.5% and ATMs only cards with 3.9% share as of March,
2014. Although credit cards were introduced in Pakistan long ago, neither banks nor the card
holders benefited from credit cards at large; however, the liberalisation of the economy in the
early 1990s enabled many banks to introduce Master and Visa credit cards, paving a way for
much wider acceptance. Almost all local and foreign commercial banks operating in Pakistan
offer credit card services to their customers, most in collaboration with VISA or MasterCard
International (Pakistan and Gulf Economist, May, 2002).
According to the State Bank of Pakistan (SBP) the total number of credit cards reached 1.613
million at the end of December, 2010 (State Bank of Pakistan, 2010). In a recent study
conducted by Oxford Policy Management it was revealed that consumer credit specifically, and
credit in the private sector more generally, has grown sharply in the last decade and the
24 Royal Bank of Scotland Group Plc. sold its Pakistan division to Faysal Bank Ltd. in 2010. See
million
25 Pakistan has connected its two ATM networks since 16 March 2004.
links-its-2-atm-networks/