It is quite apparent that Pakistan is moving with the times when it comes to operational efficiency in the banking system and innovation in catering to clients' demands on a fast-track basis. In keeping with the tradition, Pakistan is also now leaping forward in the rapidly evolving international payments arena and making quick gains in this particular field. According to the latest annual payment system review released by the SBP for the year FY14, country's electronic and mobile banking witnessed visible progress during 2013-14 and emerged as the fastest growing payment channel among all alternative delivery channels (ADCs) in terms of both volume and value. Internet banking showed a very impressive growth of 80 percent, reaching 17 million transactions while mobile banking also showed an inspiring increase of 149 percent, reaching Rs 67.2 billion. Retail payments during 2013-14 registered substantial growth and point-of-sale transactions reached 24 million, valuing Rs 124 billion. These transactions were 33 percent higher in volume and 38.5 percent in value than last year. ATM transactions recorded notable increase and stood at 258 million with a value of Rs 2.6 trillion, showing a growth of around 30 percent in volume and value. Volume and value of call centres and interactive voice response (IVR) banking was 0.67 million and Rs 9.5 billion respectively, showing growth rates of 4 percent in volume and 17 percent in value. It was also reported that the real-time online banking transactions increased to around 98.5 million in terms of volume and Rs 30.2 trillion in value, showing a growth about 11 percent each. Real-time gross settlement processed also stood higher at about 600,000 payments as compared to 488,018 transactions in FY13, showing an increase of 23 percent during the year.
A very robust growth in the usage of electronic banking and payments system in the country during the recent period is indeed an encouraging development for the country. An efficient payment system guaranteeing a speedy mechanism to settle money transactions is definitely a prerequisite for fostering economic activity and spurring growth in a country. The fact that Pakistan has not lagged behind other countries in this particular area, speaks highly of the innovate approach of the concerned stakeholders and their close collaboration at all levels. On the one hand, different financial institutions of the country are competing between themselves to introduce and upgrade their innovative products and channels while a variety of non-bank players, on the other hand, are continuously busy in bringing the most up-to-date electronic payment products, like e-wallets, m-wallets, multi-purpose cards and their smart applications in the market. The new technologies adopted in the developed financial markets are often quickly transferred to the home market. The SBP has also played its role in the smooth transition to the new arrangement by promoting efficiency, security, innovation and mass acceptability while ensuring competition and a level-playing field for all payment participants. Its recent initiatives include certain projects related to Electronic Payment Gateways, prevention of e-banking fraudulent transactions and guidelines for prepaid cards. It could also be argued that Pakistan would not have made this kind of progress if nationalised banks were not privatised and foreign banks were not encouraged to expand their operations and introduce new technologies.
The side-effects of such a transition have also been generally positive. Unprecedented growth in electronic banking has increased 'inclusiveness', expanded the banks' outreach to hitherto neglected areas of the country and increased demand for micro credit to a certain extent. Profitability of banks should also increase due to lower staff requirements and reduced need to maintain the offices and other premises. However, it needs to be mentioned that banks have to be more vigilant in checking the possibility of fraud and be prepared to invest continuously in upgrading its infrastructure to face intense competition in the market. Our banks, undoubtedly, are successfully competing in the international payments arena and, in particular, have played a pioneering role in enhancing country's home remittances to the present level by perfecting their internal procedures. The government, however, has not paid enough attention to the improvement in the standards of working in National Saving Centres which continue to be in dismal shape and are a pain in the neck for the elderly who visit their offices for getting their regular returns on their investments. The government could earn their gratitude by fully computerising the offices of NSCs and transferring their monthly profits directly into their bank accounts which should not be a difficult task in an age of advanced technology.
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