Retail Payment Systems
In the OIC Member Countries
80
The inadequacies of infrastructure is a major stumbling block for people in Pakistan in their
efforts to take advantage of electronic banking. Research by Shamshad (2006) showed that
only 42.27% of bank branches are connected and working online. Similarly, Bakhtiar (2005)
revealed that only 12% of customers were familiar with credit cards and debit cards and only
8% were aware of online banking facilities. Even though the internet users are increasing,
perhaps the cost of internet connections and telephone services remained relatively high,
resulting in lower usage of online and mobile banking.
Branchless Banking
Branchless banking, on the other hand, can be considered as a fresh innovation that made a
significant progress in the country as reflected in the growth of government to person (G2P)
payments that were up more than 150 percent during the first quarter of 2014. This particular
innovation would help in reaching the unbanked and achieving the objective of financial
inclusion, as well as ensuring transparency in the economy.
Summary
Pakistan’s experience with retail payment systems is volatile and evidently undergoing many
forms of simultaneous transition with major potential. While the move to mobile money is
significant, there is no clear pattern in the strategic behaviour of banks concerning which retail
payment systems might dominate. The highest priority, however, will be to bring a greater
proportion of the population into banking and to ensure that those who have disposable
income are able to participate in modern retail markets.