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Pakistan's "direct system" for digital payments |
Prime Minister Imran Khan launched Pakistan's first instant payment system
Prime Minister Imran Khan launched Pakistan's first instant payment system - Direct to enable instant digital payments in individuals, businesses and government agencies.
This state-of-the-art payment system will be used to address small-scale retail payments in real time, while simultaneously providing cheap and global access to all players in the financial industry, including banks and tech companies.
Dr. Raza Baqir said that the central bank has been encouraging technical innovations in the banking and payment system for a long time. However, with the Prime Minister's vision and his support, he has stepped up his efforts to accelerate the pace of digitization in the country.
To modernize the country's banking and payment system, the SBP has undertaken various initiatives such as enabling Fantix and modernizing the payment infrastructure.
Referring to the National Payments Strategy, developed with the help of the World Bank and announced in November 2019, Governor Baqir remarked that the RST is the first major step in implementing the strategy.
He highlighted that the SBP launched the Rast project in collaboration with the Bill and Melinda Gates Foundation and Karandaz Pakistan after a thorough review of the ground realities in line with the existing concessions of the project and international best practices and standards.
SBP Governor Dr. Raza Baqir:
Dr. Baqir told the gathering that the fast payment system would help boost economic growth, especially by facilitating small businesses and individuals. He shared the plan to launch SBP in a phased manner, starting with the bulk payment module which will include digitization of installment payments, salaries, pensions and other payments of government departments.
Pakistan has seen fewer electronic transactions for a number of reasons, including low banking penetration, lack of trust, and awareness of digital payment methods, limited interoperability, difficult access, and high transaction costs.
Direct features
Will provide direct instant payment services, as it will facilitate real-time digital payments to individuals, merchants, businesses and government agencies.
It will charge end users with no transaction costs. Designed to work on a cost-recovery model, Rust will make digital payments affordable to end users of all economic backgrounds.
The utility sector will work on wide interoperability. This will allow all financial institutions to connect seamlessly to the customers of any financial institution through a single link to the central infrastructure as digital payments are accessible in any channel.
It will offer customer focused innovative products and services. Rast will be built on state-of-the-art technology, which will enable financial institutions to develop innovative and user-friendly digital payment products and services (such as pay by phone number / email).
This system will ensure trust and security and introduce secure payment types, ensure that every transaction is authorized by the payer, and data protection and fraud detection. Services will be offered.
The bank
There are a total of 44 banks, with a network of 16,121 branches. These institutions are licensed to provide full financial services to Pakistanis.
PSOs / PSPs
Licensed under the Payment System Operator / Payment Services Provider (PSO & PSP) 2014, these entities are licensed to provide the following services to Pakistanis.
Integrated electronic transaction platform.
It may enter into agreements with banks, FIs, and other PSOs and merchants of PSOs, e-commerce service providers, and any other company to provide essential services to PSOs and PSPs under these rules.
3. EMIs
Electronic Money Institutions (EMIs) offer modern, user-friendly and low-cost digital payment devices such as wallets, prepaid cards, and contactless payment devices. E-Money has been instrumental in digitizing different types of payments in different countries.
EMIs in Pakistan will offer mutual and secure digital payment products and services to end customers.
Under the regulation, prospective EMI candidates square measure granted EMI license in 3 stages: in-principle approval, approval for commencement of pilot operations, and final approval, ie license. Government agencies:
Government agencies play an important role in enhancing digital financial services to Pakistanis. Enables direct installment payments, salary payments, and the transfer of person (G2P) to another government.
Payment infrastructure in Pakistan
There is a collaboration between Rast Project Karandaz and the State Bank of Pakistan (SBP). The project aims to improve the payment infrastructure, further develop digital financial services, reduce reliance on cash, and promote financial inclusion in Pakistan.
In the next steps, Rust will digitize the payments of micro and small business owners or merchants, who can then make timely payments to suppliers and fulfill other immediate payment obligations.
