The State Bank of Pakistan (SBP) has advised conventional banks to re-design their future strategy to remain in the business, as outpaced progress by branchless banking is challenging them. "You {conventional banks} need to re-make your future strategy very quickly," Syed Irfan Ali, Executive Director, State Bank of Pakistan, said Thursday.
He was speaking at the second Pakistan Payment Summit, 2016, jointly organized by Total Communications, State Bank of Pakistan and 1Link. He said that number of physical branches would cross 15,000 mark this year, but "how long would they be there?" In comparison with them the number of branchless banking agents has crossed 400,000 mark. Eight years ago, it seemed to be a miracle to have 50,000 agents in the system, he said.
According to the central bank, there are some 35 commercial banks, including Islamic banks of which nine banks in collaboration with mobile phone service providers are offering branchless banking services in Pakistan.
Ali said the need for ATM machines in the country is almost four times higher than the existing number of machines in place. "There are 11,000 ATM machines at present. We need some 40,000 in the country," he added. He said the SBP has challenged itself to provide access of banking services to 50 percent adult population of the country by 2020. The digital payment system is helping greatly for the financial inclusion.
The SBP remains in constant collaboration with Pakistan Telecommunication Authority to support growth in digital payment system. It also remains in touch with ministries of commerce, finance and IT in this regard, he said. Qasif Shahid, Founder and CEO - FinJa, said that many developed countries have transformed from cash-heavy societies to cashless societies, including Norway, Sweden, Scandinavia and Australia.
Pakistan is in the middle of this trajectory. It is moving at fast pace from analog to digital payment system. "It is moving from cash-heavy to cash slide society now. It will later transform into a cashless society," he said. Yahya Khan, VP Financial Services, Easypaisa, Telenor Pakistan, said that $8 billion worth cash is converting into digital cash every year, which comes to 2.5 percent of GDP.
Aurangzeb Khan, Country Manager - Pakistan and Afghanistan, MasterCard said that one of the key challenges this market faces is limited acceptance, with our Masterpass QR Solution we are aiming at establishing a complete interoperable digital payments ecosystem in the country allowing acquirers to accelerate acceptance to millions of locations in the next couple of years and enabling issuers to facilitate their consumer to move away from cash.
The one-day conference also held three panel discussions on collective vision for digital banking, creating a cashless society and future of merchant payments. David Noel Lardin, Director - Banking Solutions and Services - Middle East and Africa, Gemalto also spoke on the occasion.-PR